The Federal Reserve is moving forward with rules for stablecoins under the GENIUS Act, including oversight of yield programs.
The Fed proposed two stablecoin rules on Thursday under the GENIUS Act. One covers capital, reserves and permitted activities. The other sets out how Fed-regulated banks can apply to issue their own stablecoins.
Both proposals are open for 60 days of public comment. Regulators have already missed the law's July 2026 deadline, and final rules could still take months or longer.
Rewards remain a sticking point. GENIUS bans issuers from paying interest or yield just for holding stablecoins. The Fed's proposal would presume certain third-party arrangements also breach that ban, although there appears to be a narrow opening for rewards resembling credit-card incentives. With the Clarity Act's proposed changes unsuccessful, GENIUS remains the primary law governing those rewards.
My take: I'm bullish. Banks getting a defined process for issuing stablecoins is a meaningful step toward wider adoption. It gives institutions something concrete to plan around, even if we're still waiting for the final rules.
I'd like to see more freedom on rewards. Platforms should have room to compete for users, and that part of the proposal deserves scrutiny. But reserve requirements and reliable redemption make sense to me. If we're expecting people to use stablecoins at scale, they need to trust that they can get their money out when markets get ugly.
The delays are frustrating. Still, a clearer route for banks to issue and use stablecoins makes me more confident about where this is going.
The Fed proposed two stablecoin rules on Thursday under the GENIUS Act. One covers capital, reserves and permitted activities. The other sets out how Fed-regulated banks can apply to issue their own stablecoins.
Both proposals are open for 60 days of public comment. Regulators have already missed the law's July 2026 deadline, and final rules could still take months or longer.
Rewards remain a sticking point. GENIUS bans issuers from paying interest or yield just for holding stablecoins. The Fed's proposal would presume certain third-party arrangements also breach that ban, although there appears to be a narrow opening for rewards resembling credit-card incentives. With the Clarity Act's proposed changes unsuccessful, GENIUS remains the primary law governing those rewards.
My take: I'm bullish. Banks getting a defined process for issuing stablecoins is a meaningful step toward wider adoption. It gives institutions something concrete to plan around, even if we're still waiting for the final rules.
I'd like to see more freedom on rewards. Platforms should have room to compete for users, and that part of the proposal deserves scrutiny. But reserve requirements and reliable redemption make sense to me. If we're expecting people to use stablecoins at scale, they need to trust that they can get their money out when markets get ugly.
The delays are frustrating. Still, a clearer route for banks to issue and use stablecoins makes me more confident about where this is going.
