Which rule lets banks issue stablecoins?

TLDR

The FDICs proposed rule implementing the GENIUS Act creates an approval process that lets FDIC?supervised banks issue payment stablecoins through subsidiaries, subject to safety and soundness review (FDIC proposal coverage).

1. It establishes 12 CFR 303.252 with a formal application and a 120?day review clock (regulatory summary).
2. Issuance must be via ring?fenced subsidiaries with full 1:1 reserve backing and clear redemption standards under the GENIUS Act (rule details).
3. A 60?day public comment period precedes finalization, then additional capital and liquidity rules are expected (proposal overview).

Deep Dive

1. What The Rule Does

The FDIC board approved a notice of proposed rulemaking that implements the GENIUS Act by creating a formal pathway for banks to issue payment stablecoins through subsidiaries.

• The proposal maps to a new section, 12 CFR 303.252, requiring FDIC?supervised state nonmember banks and savings associations to apply before launching a stablecoin subsidiary (mechanics).
• Applications are reviewed for safety and soundness within a structured 120?day window, with appeals available if denied (process summary).

2. Scope And Guardrails

The framework permits issuance only through separately capitalized, ring?fenced subsidiaries, not directly on bank balance sheets.

• The GENIUS Act requires full reserve backing, prioritized holder rights in insolvency, clear redemption at par, and monthly attestations by independent auditors (statute and proposal summary).
• The FDIC will serve as primary federal supervisor for approved bank subsidiaries, with additional rules on capital, liquidity, and risk management to follow (supervisory outline).

3. Why It Matters Now

This shifts stablecoins from limbo into a bank?style regime with clear entry rules and ongoing oversight.

• The proposal moves the GENIUS Act from law into practice with a 60?day comment period, then finalization and secondary rulemakings on prudential standards (timeline).
• It opens a regulated path for banks to compete with crypto?native issuers, potentially affecting USD liquidity in crypto markets and payments rails (market context).

Conclusion

The rule that lets banks issue stablecoins is the FDICs proposed approval framework under the GENIUS Act. It permits issuance via approved subsidiaries, requires full reserves and robust redemption policies, and puts activities under federal bank supervision (rule summary). If finalized after public comment, it could bring safer, regulated bank?issued stablecoins to market and reshape the competitive landscape (proposal overview).