A First Concrete Step After the GENIUS Act

The U.S. Federal Deposit Insurance Corporation has proposed its first stablecoin-related rule following the passage of the GENIUS Act. The proposal begins the formal process of defining how federally insured depository institutions can establish stablecoin subsidiaries within the U.S. banking system.

Rather than treating stablecoins as external crypto products, the rule positions them as activities that can exist inside regulated bank structures.

What the FDIC Proposal Covers

The proposed rule focuses on process rather than product design. It sets out how banks would apply, structure, and supervise stablecoin subsidiaries rather than prescribing the technical details of each stablecoin.

Key elements include:

• Approval procedures for stablecoin subsidiaries

• Capital and liquidity expectations

• Governance and risk management requirements

• Operational separation from core banking activities

• Ongoing supervisory oversight

The goal is to create a repeatable framework rather than case by case exceptions.

Why the GENIUS Act Matters

The GENIUS Act was designed to bring stablecoins into the regulated banking perimeter instead of leaving them in regulatory limbo. It directs federal banking regulators to define how banks can safely issue or manage stablecoins without threatening financial stability or deposit insurance systems.

The FDIC’s move signals that regulators are now shifting from theory to implementation.

How This Changes the Stablecoin Landscape

Until now, most stablecoins have been issued by non bank entities operating alongside, rather than within, the U.S. banking system. The FDIC proposal opens the door for banks to issue or manage stablecoins directly through controlled subsidiaries.

That could lead to:

• Bank issued dollar stablecoins

• Clearer reserve and custody standards

• Stronger consumer protections

• Easier integration with payment systems

• Greater institutional confidence

It also reduces uncertainty for banks that have been hesitant to engage due to unclear regulatory expectations.

A Gradual and Cautious Approach

The FDIC emphasized that this is an initial framework and not a green light for rapid expansion. Stablecoin subsidiaries would still be subject to close supervision, stress testing, and operational safeguards.

The approach reflects a broader regulatory philosophy. Stablecoins are not being rushed into the system. They are being absorbed carefully.

What Comes Next

The proposal will now enter a public comment period, during which banks, fintech firms, and industry participants can provide feedback. Final rules are expected to follow after revisions.

If adopted, the framework would give U.S. banks a clear path to participate in stablecoin issuance and management for the first time.

For the crypto industry, this represents a turning point. Stablecoins are no longer treated as parallel infrastructure. They are being built into the core of the U.S. banking system.