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The FDIC proposes that banks who wish to issue payment stablecoins must go through a formal approval procedure.
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Only banks supervised by the FDIC can issue stablecoins via approved subsidiaries.
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Rules emphasize safety, full reserves and strict redemption requirements.
The U.S. regulators tighten the rules on who can issue stablecoins and how. On December 16, the Federal Deposit Insurance Corporation (FDIC) approved a proposal that explains the process banks must follow to apply to issue payment-stablecoins in accordance with the GENIUS Act. This law was passed earlier this year and brought stablecoins into federal oversight.
The proposal does not open the door to crypto native firms but instead places stablecoins firmly within the traditional banking system.
Stablecoins are now an important part of the crypto market infrastructure. They handle billions of dollars of daily transactions. Regulators are concerned that these digital tokens may pose similar risks to past crypto collapses if there are no clear rules.
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Who would be allowed to issue stablecoins?
According to the proposal, banks are not allowed to issue stablecoins. Instead, they will need to create a separate company and apply for FDIC approval.
Only state-chartered, FDIC-supervised banks and savings associations qualify. Most crypto companies will be excluded unless they are partnered with a regulated institution.
This means:
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Stablecoins will be issued by banks and not by independent crypto firms
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Issuers will be subject to existing banking supervision
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If activities are deemed unsafe, they could be denied approval
The FDIC would evaluate applications based on their financial strength, risk control, and management quality. Stablecoins need to be fully backed and easily redeemable. They also need to be supported by strong compliance systems.
What can approved stablecoin issuers actually do?
The proposal limits stablecoins to payments and services related to them. Issuers will not be allowed to re-use reserves or engage in speculative activity.
Allowed activities are defined very narrowly:
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Issuing and redeeming stablecoins for payment
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Managing Reserve Assets
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Provide custody and safekeeping Services
What happens if a request is denied?
The law establishes a strict timeline. The FDIC is required to act within 120 calendar days after receiving a completed application. If it fails to act, approval could be automatic.
Applicants who have been denied can appeal. This includes requesting an official hearing. Regulators retain the right to impose conditions and block proposals that they deem risky.
What Does This Mean For Crypto?
The proposal makes it clear that stablecoins will be closer to traditional banking and not treated as a continuation of the open cryptomarket.
The rule provides a regulated pathway into digital payments for banks. It reinforces the reality that many crypto firms already face: issuing stablecoins widely used in the U.S. may require a banking partner.
The public will have 60 days to comment on the proposal, and final rules are expected well before the GENIUS Act 2027 effective date.
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