The Federal Deposit Insurance Corporation approved a notice of proposed rulemaking on April 7, 2026, setting binding operating standards for stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins Act. The FDIC press release confirmed the Board of Directors voted to advance the rule, which covers reserve assets, capital floors, redemption timelines, and risk management requirements for FDIC-supervised permitted payment stablecoin issuers.
The proposed rule is the agency’s second GENIUS Act rulemaking. The first, issued December 19, 2025, set out application procedures for insured depository institutions seeking to launch stablecoin subsidiaries. This one governs how those issuers must operate once approved. A 60-day public comment period opens after the rule’s publication in the Federal Register.
Reserves, Redemption, and the $5M Floor
Every permitted payment stablecoin issuer, or PPSI, must hold reserves on a strict 1:1 basis against all outstanding stablecoins. Those reserves must stay fully segregated. They cannot be reused or pledged for any other purpose. Issuers must also publish a redemption policy and fulfill requests within two business days under normal conditions.
Large redemption events get special treatment. If requests exceed 10% of total outstanding issuance within any single 24-hour window, the issuer must notify the FDIC immediately and may request additional time at the agency’s discretion. New PPSIs face a $5 million minimum capital requirement for their first three years. After that, capital must consist entirely of common equity tier 1 and additional tier 1 instruments. No Tier 2 capital is allowed. Parent banks must also deconsolidate PPSI subsidiaries when calculating their own regulatory capital.
On top of the reserve pool, issuers must maintain a separate liquidity buffer equal to 12 months of total operating expenses. That backstop sits apart from the 1:1 reserve requirement and is meant to cover operational risk, not redemptions.
What FDIC Insurance Actually Covers
One detail the full proposed rulemaking makes plain: FDIC deposit insurance does not extend to individual stablecoin holders. Deposits held by insured banks as PPSI reserves qualify as corporate deposits of the issuer, covered up to the standard $250,000 limit. Pass-through coverage to token holders does not apply. The GENIUS Act explicitly bars deposit insurance for stablecoins themselves.
This distinction carries real weight for anyone treating regulated stablecoins as equivalent to insured bank balances. The rule draws a hard line there. A person holding $50,000 in a regulated stablecoin does not have that amount protected by federal deposit insurance, even if the issuer banks those reserves with an FDIC-insured institution.
According to BullTheory.io on X, “every stablecoin must be backed 1:1 with real assets… the issuer must hold $1 billion in actual reserves without any exceptions,” and reserves “cannot be rehypothecated or reused.” BullTheory.io also noted the FDIC insurance point directly: “FDIC insurance covers the issuer’s reserve deposits at the bank level, not individual token holders.” Text: 196/210 | With URL: 266/280
Tokenized Deposits Get Clarity Too
The proposed rule also addresses tokenized deposits separately from stablecoins. If a tokenized liability meets the Federal Deposit Insurance Act’s statutory definition of “deposit” under 12 U.S.C. 1813(l), it receives identical insurance treatment to a traditional deposit. The technology or recordkeeping method used to record the liability does not change that determination.
FDIC Chairman Travis Hill said in his April 7 statement that the proposal would “reaffirm by regulation that deposits in tokenized form remain deposits under the Federal Deposit Insurance Act.” Hill also noted the rule aligns with a proposal the Office of the Comptroller of the Currency issued in late February 2026 for entities under its own supervision. He asked for comment on 144 specific questions, including permissible activities, capital treatment, and the law’s prohibition on yield paid to stablecoin holders.
That yield ban directly affects products currently in the market. Stablecoin issuers structured to distribute interest or rewards to holders would need to restructure. Hill acknowledged the volume of open questions and said the agency “genuinely invites robust feedback.”
The comment period timeline runs against the GENIUS Act’s July 18, 2026 deadline for agencies to finalize implementing regulations. Public comments can be submitted after the rule appears in the Federal Register.
