Federal Reserve Proposes Strict Stablecoin Capital and Reserve Rules Under GENIUS Act

The U.S. Federal Reserve has unveiled two regulatory proposals to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The draft framework mandates that payment stablecoin issuers under Fed oversight fully back tokens with high-quality liquid assets, primarily short-term U.S. Treasury bills. The rules impose standardized capital buffers against credit and operational risks, strictly prohibit interest or yield solely for holding tokens, and outline application procedures for Fed-supervised banks seeking to issue stablecoins. The proposals are open for a 60-day public comment period ahead of the statutory January 2027 enforcement deadline.