The U.S. Federal Deposit Insurance Corp formally proposed its approach to regulating stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins Act.
The proposal establishes capital, liquidity and custody standards for depository institutions issuing stablecoins through subsidiaries. The rule will undergo a 60-day public comment period addressing 144 technical questions.
Stablecoins will not receive deposit insurance protection currently available to traditional banking accounts. The FDIC also prohibited issuers from representing tokens pay interest "simply for holding or using a payment stablecoin" through third-party arrangements.
The agency proposed capital requirements plus an operational backstop based on previous year's operating expenses to manage business risks.
Implementation faces potential changes as the Senate works on the Digital Asset Market Clarity Act, addressing yield-bearing stablecoin debates. The Treasury Department and market regulators face few political obstacles with Republican appointees controlling key positions.