Federal Reserve Opens 60-Day Comment Period on Dual GENIUS Act Stablecoin Rules

The U.S. Federal Reserve has published two proposed rules designed to fulfil its obligations under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, joining several other federal agencies still completing their own portions of a multi-agency regulatory framework. Both proposals are now subject to 60-day public comment periods before the Fed can revise and finalise them, a process that typically runs several months or longer.

The first proposal addresses capital and reserve requirements, mandating that stablecoins be backed by the most liquid assets available and that issuers maintain a sound financial foundation under stress. It also delineates which stablecoin-related activities are permissible at Fed-supervised banks and contains the framework’s most contested element: how stablecoin rewards programmes should be treated. On that question, the Fed has aligned closely with the Office of the Comptroller of the Currency (OCC), proposing that arrangements involving third parties making payments to stablecoin holders would generally be presumed prohibited under the GENIUS Act’s ban on interest or yield payments. A narrow carve-out appears possible for incentive structures analogous to credit-card rewards, though nothing is settled at this stage. The second proposal sets out the procedural pathway for a regulated bank seeking to launch its own stablecoin, requiring submission of a business plan, financial information, and relevant policies and procedures.

All of these proposals arrive well after the July 2026 statutory deadline the GENIUS Act imposed on banking regulators and the Treasury Department, though meaningful progress has been made in recent months. The Treasury published its own GENIUS Act proposal last month, covering federal definitions of stablecoin issuance and who falls within the law’s scope, and the Federal Deposit Insurance Corp. opened its portion of the process in December. Fed Governor Michael Barr, former head of the Fed’s supervision programme, framed the reserve requirement rationale in terms of par redemption reliability across a range of market conditions, including stress episodes affecting both liquid government debt and individual issuers.

For operators in the stablecoin space, the practical stakes centre on the rewards question. The failure of the Digital Asset Market Clarity Act means the GENIUS Act now stands as the governing law on stablecoin incentives, leaving platforms that had anticipated broader latitude to reassess their product assumptions against a framework that may permit only a narrow band of reward structures.