The acting head of the Federal Deposit Insurance Corp. of the United States said the banking regulator plans to begin proposing rules for stablecoin issuers before the close of December, according to testimony Travis Hill is set to give Tuesday before the House Financial Services Committee.
First, the regulator’s agenda for implementing the Guiding and Setting National Innovation for US Stablecoins (GENIUS) Act: issuing a proposal for how the agency will treat issuers seeking federal oversight.
“The FDIC has begun promulgating rules to implement the GENIUS Act; we plan to issue a proposed rule to establish our enforcement framework later this month and a proposed rule to implement the prudential requirements of the GENIUS Act for issuers of payment stablecoins supervised by the FDIC early next year,” according to Hill’s prepared testimony.
The GENIUS Act envisions a collection of federal and state entities participating in the oversight of the stablecoin industry. After determining the application process, the FDIC, which regulates deposit insurance and supervises thousands of banks, must write rules on capital requirements for regulated banks that want to issue stablecoins. It is also responsible for liquidity standards and regulating the quality of reserves constituted by issuers.
A federal agency working on such rules must make a proposal open to public comment for a period of time, which typically lasts months. Once the comments have been considered, the regulator can then publish a final version in which the new system is generally set to come into force over an extended period of time.
Other agencies, including the Treasury Department, have also been working on their responsibilities under the GENIUS Act.
Hill also discussed other regulatory priorities in his testimony. In light of recommendations from a report from the President’s Task Force on Digital Asset Markets earlier this year, the FDIC is also “currently developing guidance to provide further clarity regarding the regulatory status of tokenized deposits,” Hill said.
Tuesday’s House hearing will also receive testimony from other bank and credit union regulators, including the Federal Reserve. Over the past couple of years, crypto has been a common topic of discussion whenever congressional panels have financial regulators in front of them.
Federal Reserve Vice Chair for Oversight Michelle Bowman said the central bank was working to “develop capital, liquidity, and diversification regulations for stablecoin issuers as required by the GENIUS Act” in her own testimony.
