The acting head of the US Federal Deposit Insurance Corp. said the banking regulator expects to begin proposing rules for stablecoin issuers by the end of December, according to testimony Travis Hill is preparing to deliver Tuesday before the House Financial Services Committee.
First up on the regulator’s agenda for implementing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act: issuing a proposal for how the agency will handle issuers applying for federal oversight.
“The FDIC has begun work on issuing rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our application framework later this month and a proposed rule to implement the GENIUS Act’s supervisory requirements for FDIC-supervised payment stablecoin issuers early next year,” according to Hill’s prepared testimony.
The GENIUS Act contemplates a number of federal and state entities participating in the oversight of the stablecoin sector. After figuring out the application process, the FDIC, which regulates deposit insurance and oversees thousands of banks, must write capital requirements rules for the regulated banks that want to issue stablecoins. It is also responsible for liquidity standards and for regulating the quality of reserve issuers set aside.
A federal agency working on such regulations must submit a proposal that is open to public comment for a period that usually lasts months. Once the comments are reviewed, the regulator can then issue a final version, with the new system generally set to take effect over a longer period.
Other agencies, including the Treasury Department, have also been working on their parts of the GENIUS Act tasks.
Hill also touched on other regulatory priorities in his testimony. In light of the recommendations of a report by the President’s Task Force on Digital Asset Markets earlier this year, the FDIC is also “currently developing guidance to provide additional clarity regarding the regulatory status of tokenized deposits,” Hill said.
The House hearing on Tuesday will also receive testimony from other bank and credit union regulators, including the Federal Reserve. For the past few years, crypto has been a common topic of discussion when congressional panels have financial regulators in front of them.
Federal Reserve Vice Chair for Supervision Michelle Bowman said the central bank was working “to develop capital, liquidity and diversification rules for stablecoin issuers as required by the GENIUS Act” in her own prepared testimony.
