The Federal Reserve’s stablecoin proposals on Thursday (Sept. 24) put a third federal bank regulator’s plans on the table.

Banks can now see how the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. propose to supervise their digital dollars. The next decision is which banks can make a business of issuing them.

The proposals also bring stablecoins into the familiar bank strategy discussion of the choice of charter and regulator. A national bank issuing through a subsidiary would work principally with the OCC. An FDIC-supervised state bank would follow the FDIC’s process, while a Federal Reserve-supervised state member bank would use the Fed’s. All three agencies are implementing the GENIUS Act, but each is setting out its own approval and supervisory requirements.

Under the Fed’s proposal, supervised issuers would have to fully back their payment stablecoins with eligible assets, including short-term Treasury bills and other highly liquid holdings. The Fed also proposed capital and risk management standards and rules for firms safeguarding the reserves. A separate proposal would require banks seeking approval for an issuing subsidiary to submit a business plan and financial information. Both proposals remain open for comment.

The OCC proposed its framework in February. It covers reserves, redemption, custody, applications, reporting and supervision for issuers under its authority, including subsidiaries of national banks. In June, the agency also proposed weekly and quarterly reporting forms.

The FDIC’s April proposal addresses reserves, redemptions, capital, risk management and custody for issuers it supervises.

Source link