FDIC proposes first GENIUS Act stablecoin application rule for bank-issued, dollar-backed tokens
The FDIC has published its first formal rule proposal implementing the GENIUS Act framework, establishing an application process for FDIC‑insured banks that want to issue dollar‑backed payment stablecoins through subsidiaries. The rule requires banks to apply to the FDIC with business descriptions, financials, governance and risk‑management plans. The agency must deem applications complete within 30 days and approve or deny within 120 days; rejections must include written reasons and can be appealed via a 30‑day hearing request with a final decision within 60 days. The FDIC is designated the primary federal regulator for eligible subsidiaries and has included a temporary safe harbor allowing limited waivers of certain statutory requirements for up to 12 months for early applications. Acting Chairman Travis Hill opened a 60‑day public comment period and said further rules on capital, liquidity and prudential risk management will follow. For crypto traders, the proposal provides clearer compliance pathways for bank‑backed stablecoins, which may encourage institutional issuance but could raise issuance costs and limit scale depending on forthcoming capital and liquidity requirements. Primary keywords: FDIC, bank-issued stablecoins, GENIUS Act, payment stablecoins; secondary keywords: subsidiary approval, application timeline, regulatory compliance, safe harbor, appeals process.
Neutral
The proposal reduces regulatory uncertainty by creating a clear application pathway and naming the FDIC as the primary regulator for bank‑backed payment stablecoins — a structural positive that could encourage bank participation and institutional issuance. That supports long‑term market development and credibility for bank‑backed stablecoins. However, the FDIC also signals forthcoming capital, liquidity and prudential rules and includes an approval process that can be time‑consuming (30/120‑day milestones plus appeals). Those requirements will likely raise operating costs and could constrain issuance scale in the near term. Short‑term price impact on any specific stablecoin is limited because the rule governs issuance framework and compliance rather than changing token economics or backing; therefore immediate market reaction should be muted. Over the medium to long term, clearer regulation is likely constructive for stablecoin adoption but could be neutral-to-moderately restrictive depending on the stringency of the upcoming prudential standards.