The Federal Deposit Insurance Corp. has proposed a formal framework allowing regulated banks to apply to issue payment stablecoins under the US GENIUS Act. The move represents an early step in implementing the laws on stablecoin provisions.

According to a 38-page document published on the FDIC website, issuance would occur through bank subsidiaries under direct federal oversight. The proposal has entered a public consultation phase before advancing to the next stage of the rulemaking process. Once finalized, the framework could shape how banks participate in the nationwide stablecoin market.

FDIC Defines Approval Structure for Bank-Issued Stablecoins

Under this proposal, banks would submit applications through their dedicated subsidiaries rather than through parent institutions. The FDIC would review both the subsidiary and its parent using standards outlined in the GENIUS Act.

This includes the institution’s financial condition, management quality, redemption policies, and ability to meet stablecoin issuance requirements. The agency would also evaluate broader safety and soundness considerations during the review process.

After approval, the FDIC would act as the primary federal regulator for the subsidiary’s stablecoin payment activities. Ongoing supervision would remain in place throughout the life of the stablecoin program. The FDIC is responsible for insuring bank deposits and supervising member institutions. In recent years, the federal agency has expanded its involvement with how banks engage with digital assets.

That shift includes reconsidering the role of reputational risk in bank supervision.
According to earlier reporting, this change could affect how financial institutions interact with crypto-related businesses.

Application Requirements and Ongoing Oversight Standards

Applicants must provide detailed explanations of ownership structures and operational strategies. They must also describe reserve management practices used to back issued stablecoins. The proposal requires engagement letters from registered public accounting firms; these documents must accompany each submission.

The FDIC will assess whether proposed stablecoin activities pose risks to financial stability, rejecting applications if the plans appear unsafe or unsound. If regulators fail to act within defined timelines, applications could receive automatic approval.
The statement outlines this provision to prevent delays in regulatory decision-making.

Once approved, issuers must meet capital, liquidity, and risk management standards; anti-money-laundering and sanctions compliance requirements will also apply. This framework establishes continuous supervision rather than one-time approval, aligning stablecoin issuance with existing bank regulatory practices.

GENIUS Act Provides Legal Foundation for Stablecoin Issuance

The GENIUS Act, short for Guiding and Establishing National Innovation for US Stablecoins, cleared the Senate in June. President Donald Trump signed the legislation into law the following month.

This act creates a national regulatory framework for payment stablecoins. It requires issuers to maintain one-to-one reserve backing with US dollars or approved high-quality liquid assets. The proposal notes that application costs would remain lower than traditional banking approvals, which could open new revenue sources for participating banks. 

Large lenders have already explored stablecoin use through partnerships with crypto firms. Citigroup has tested stablecoin payments with several crypto companies. Compared with traditional payment rails, stablecoins offer faster settlement and lower transaction costs. They also allow banks to compete directly with crypto-native issuers. 

Recent developments, including the RLUSD expansion on Coinbase’s Layer-2 blockchain, show growing real-world adoption. Regulated stablecoins have already entered active payment environments.

The FDIC is now seeking feedback from industry participants and the public. Responses may influence how quickly banks can enter the stablecoin market. 

The big question now is: Will the final rule determine how fast stablecoins integrate into the US banking system?

Also Read: FDIC Moves Ahead with New GENIUS Act Rules for Stablecoins

Conclusion

The FDIC has proposed a framework under the GENIUS Act that allows banks to issue payment stablecoins through subsidiaries. It outlines approval standards, supervision rules, and compliance requirements. Public feedback will shape the final rule, determining how quickly banks can enter the regulated stablecoin market.