GENIUS Act Stablecoin Reserves is the headline this week. The Federal Reserve unveiled new proposed rules on Thursday, September 24, 2026, that would govern GENIUS Act Stablecoin Reserves for issuers operating under its supervision, setting strict one-to-one backing requirements and standardized capital charges nearly a year after President Donald Trump signed the federal stablecoin law on July 18, 2025.
What the Reserve Proposal Requires for GENIUS Act Stablecoin Reserves
Under the Fed’s first proposal, Board-supervised issuers must hold reserve assets whose aggregate fair value equals or exceeds the par value of outstanding stablecoins at all times. Permissible reserves are limited to U.S. dollar cash, Federal Reserve Bank balances, demand deposits at insured depository institutions, Treasuries with 93 days or less remaining maturity, overnight repos backed by Treasuries, and eligible investment funds or tokenized versions of those assets.
Issuers that fall below full backing must notify the Fed, then liquidate reserves and redeem tokens unless they can promptly return to compliance. The approach mirrors the conservative backing model embedded in the GENIUS Act, giving regulators a clear yardstick to measure solvency in real time.
Capital Charges Designed for Stablecoin Risks
The capital regime is deliberately standardized rather than bank-style risk-weighted. The proposal applies a 2 percent capital charge to reserve assets held as uninsured deposit claims or undercollateralized reverse repos. On top of that, issuers face a graduated operational-risk charge of 2.0 percent on the first $20 billion of outstanding stablecoins, 1.5 percent on the next $30 billion, and 1.0 percent above $50 billion, plus a charge equal to 25 percent of an issuer’s three-year average non-reserve revenues.
Issuers that miss minimum capital levels at quarter-end must submit remediation plans, and persistent shortfalls would force liquidation of reserves and redemption of tokens. The Fed also gave issuers a two-business-day window to process redemptions, a detail confirmed by reporting from The Block.
Bank Application Process for Issuing Stablecoins
The second proposal outlines how a regulated bank can begin issuing its own stablecoins, including submitting a business plan, financial information, and relevant policies and procedures. The framework also establishes a defined process for appeals, hearings, and final decisions on applications, giving would-be bank issuers a predictable path into the market.
Stablecoin Rewards Remain a Flashpoint Under GENIUS Act Stablecoin Reserves
The framework also tackles the politically charged question of stablecoin rewards. The Fed said it sought to closely match the Office of the Comptroller of the Currency’s earlier approach, which enforces the law’s ban on issuers paying interest or yield directly to holders. Under the proposal, certain arrangements involving third parties would be presumed to be prohibited payments of interest or yield, though regulators appear to be leaving a narrow door open for credit-card-style incentive programs operated by platforms such as Coinbase.
That debate was a key sticking point in the recently failed Digital Asset Market Clarity Act, leaving the GENIUS Act as the operative law on rewards. Coinbase and other platforms have pushed for more flexibility, while bank regulators have insisted on a strict reading of the statute.
A Missed Deadline and a Locked-In January 2027 Start
The rulemaking calendar explains why this release matters. The OCC, the Fed, the FDIC, the NCUA, and Treasury had one year from the July 18, 2025 signing to finalize implementing regulations. They missed the July 18, 2026 statutory deadline, and the statute does not extend the timetable for missed deadlines.
Because the law takes effect on the earlier of January 18, 2027, which is 18 months after enactment, or 120 days after final rules, and because rules finalized after September 20, 2026 cannot make that 120-day window close before January, the January date is now effectively locked as the regime’s start. The proposals are open for 60-day public comment periods.
Multi-Agency Rollout and SEC, CFTC Categorization
The OCC issued its own GENIUS Act proposal in February, covering national banks that want to issue stablecoins directly. The FDIC followed in April with requirements for FDIC-supervised banks and insured depository institutions. Three regulators now have proposals spanning three supervised populations under one statute.
In March, the SEC and CFTC issued joint guidance sorting crypto assets into five categories, and payment stablecoins issued under the GENIUS Act landed in a bucket categorically excluded from the definition of a security. Federal Reserve Governor Michael Barr supported the latest proposal but pressed for sharper anti-money-laundering standards, including a rule that would block supervisory or enforcement action on an AML deficiency unless the issue is significant or systemic.
With comment periods now open and a January 2027 effective date effectively locked in, the Fed’s proposal will shape the next era of GENIUS Act Stablecoin Reserves, defining how issuers back, capitalize, and redeem the tokens that already move billions of dollars through the U.S. digital economy every day.
With comment periods now open and a January 2027 effective date effectively locked in, the Fed’s proposal will shape the next era of GENIUS Act Stablecoin Reserves, defining how issuers back, capitalize, and redeem the tokens that already move billions of dollars through the U.S. digital economy every day.
Industry analysts note that the Fed’s framework would impose stricter liquidity coverage ratios on payment stablecoin issuers than those applied to money market funds, while permitting a limited share of high-quality municipal securities to back GENIUS Act Stablecoin Reserves during the first eighteen months of operation.