The U.S. Federal Reserve details its plan for regulating payment stablecoins with two proposed rules mandating strict reserve, capital, and risk management standards. S. Federal Reserve has unveiled its most detailed plan yet for regulating payment stablecoins, releasing two proposed rules that mandate strict reserve, capital, and risk management standards.
Announced on September 24, 2026, the proposals are a critical step in implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, the landmark legislation signed into law in 2025. These Federal Reserve details provide crucial insights into the future of stablecoin regulation.
These new Fed stablecoin rules aim to bring digital currencies pegged to the U.S. dollar firmly within the nation’s regulatory perimeter, treating their issuers more like traditional financial institutions. The move seeks to balance financial innovation with stability and consumer protection, addressing long-standing concerns about what assets actually back the billions of dollars in stablecoins currently in circulation.
Federal Reserve details new reserve requirements
The proposals arrive as the central bank works with other agencies to create a unified framework ahead of a 2027 deadline.
The first and most substantial proposal from the Federal Reserve Board focuses squarely on the assets backing payment stablecoins. It mandates that Board-supervised issuers must hold assets equal to 100% of the value of their outstanding stablecoins at all times, ensuring a one-to-one backing that can meet customer redemptions.
Under the proposed rules, the list of permissible reserve assets is tightly restricted to high-quality, liquid assets to minimize risk. These include U.S. dollars, balances held at a Federal Reserve Bank, and short-term U.S. Treasury bills with 93 days or less remaining to maturity.
This emphasis on the stablecoin role in debt issuance could further entwine the digital asset market and the broader market for government securities.
Other acceptable assets include certain demand deposits at insured banks and specific overnight repurchase agreements collateralized by Treasuries. The proposal also requires that these reserve assets be held in a segregated account, legally separate from the issuer’s operational funds, to protect coin holders in the event of an issuer’s failure. To ensure liquidity, issuers must be able to honor redemption requests within two business days.
Graduated capital standards for issuers
Beyond reserves, the Fed is proposing a new set of standardized capital requirements designed to absorb potential losses from operational failures or credit risks. This marks a significant step in treating stablecoin issuance as a core financial activity that requires its own prudential backstops, much like traditional banking.
The plan introduces a graduated operational-risk capital charge that increases with the size of the issuer. Firms would need to hold capital equal to 2% on their first $20 billion of outstanding stablecoins, 1.5% on the next $30 billion, and 1% on any amount exceeding $50 billion. A separate capital charge would be tied to revenue generated from any non-reserve activities.
The rules also penalize riskier reserve holdings. For instance, if an issuer holds reserves in uninsured deposits or in undercollateralized reverse repurchase agreements, a 2% capital requirement would apply to those assets. Failure to meet these minimums would trigger a swift response.
An issuer falling short at the end of a quarter must submit a remediation plan, and if the capital is not restored by the end of the following quarter, the Fed could force it to liquidate reserves and redeem all of its stablecoins.
Governor Barr signals lingering AML concerns
While the proposals received broad support, Federal Reserve Governor Michael Barr highlighted a potential weakness in the new framework concerning anti-money laundering (AML) enforcement. Barr, who has previously voiced concerns about gaps in the GENIUS Act, supported the overall direction but expressed reservations about a specific provision.
His concern centers on a standard that would prevent the Board from taking supervisory or enforcement action over an AML deficiency unless the problem is deemed “significant or systemic.” Barr warned that this high threshold could have “unknown effects” on the Board’s ability to ensure that institutions maintain fully compliant AML programs, potentially allowing smaller but still material risks to go unaddressed.
“As is the case on the Board’s July proposal, I am concerned that the ‘significant or systemic’ standard may have unknown effects on the Board’s ability to effectively substantiate that an institution establishes and maintains compliant programs,” Barr said, signaling a desire for more robust enforcement powers.
The road to a regulated stablecoin market
These proposals are the latest in a multi-agency effort to implement the GENIUS Act, which was signed into law in July 2025 and has an effective date of January 18, 2027. By that date, it will be illegal to issue a payment stablecoin in the United States without a federal or approved state license.
While the statutory deadline for regulators to finalize their rules was July 18, 2026, all agencies missed this target. The Fed joins a number of other bodies that have already published their own implementation plans.
The Office of the Comptroller of the Currency (OCC) released its proposal in February 2026, followed by the Federal Deposit Insurance Corporation (FDIC) in April and the National Credit Union Administration (NCUA) in May. The Treasury Department also issued a proposed rule in August 2026.
The Fed’s second proposal also aims to streamline the path for traditional banks to enter the market. It establishes a tailored application process for Board-supervised banks that wish to issue stablecoins, requiring a detailed business plan and financial information.
This creates a formal, regulated pathway for established financial players to compete with crypto-native firms like Circle Internet (USDC) and Tether (USDT). This regulatory clarity could also influence broader stablecoin development, including efforts to launch non-USD stablecoin initiatives globally.
The public will have 60 days to comment on the proposals after their publication in the Federal Register.