On September 24, the Fed requested public comment on two proposed rules implementing the GENIUS Act, which was enacted in July 2025 to establish a regulatory framework for payment stablecoins. The first proposal would establish reserve, capital, redemption, risk management, and custodial requirements for Board-supervised permitted payment stablecoin issuers (PPSIs). Under the proposal, PPSIs would be required to maintain identifiable reserve assets backing outstanding payment stablecoins on at least a one-to-one basis, segregated from other assets and recorded at fair value at least once per calendar day. Consistent with the GENIUS Act, the proposal would prohibit PPSIs from paying interest or yield solely in connection with the holding, use, or retention of payment stablecoins. The proposal would also set principles-based risk management standards, custodial requirements for entities providing safekeeping services for reserve assets and private keys, and a tying prohibition applicable to all PPSIs regardless of their primary regulator. The GENIUS Act takes effect on the earlier of January 18, 2027, or 120 days after primary federal regulators issue final implementing rules. The OCC, the FDIC, and the NCUA have issued separate proposed rules to implement the GENIUS Act with respect to the entities they regulate.

The second proposal would create a tailored application process for insured state member banks seeking Board approval for a subsidiary to issue payment stablecoins. Applicants would submit an application by letter including a business plan, financial information, relevant policies and procedures, proposed capital structure documentation, and biographical reports for proposed officers or directors. The Board would be required to render a decision within 120 days of receiving a substantially complete application, and the application would be deemed approved if the Board failed to act within that period. Comments on both proposals must be submitted by November 30.