Key Takeaways
- The FDIC proposed a new rule for banks seeking to issue payment stablecoins through subsidiaries.
- The proposal outlines application, evaluation, and appeal processes under the GENIUS Act.
The Federal Deposit Insurance Corporation (FDIC) has proposed a new rule to implement the GENIUS Act framework for bank-issued payment stablecoins. Under the proposal, only authorized stablecoin issuers could operate in the US.
The framework establishes a tailored application process, sets evaluation criteria and timelines, and includes an appeals mechanism, designating the FDIC as the primary federal regulator for eligible subsidiaries.
FDIC-supervised institutions seeking to issue payment stablecoins through their subsidiary are required to apply to the FDIC. Applicants would also need to provide financial details for the subsidiary, as well as additional information if requested.
The FDIC would review applications for financial soundness, management quality, and regulatory compliance. The agency has 30 days to deem applications complete, and must approve or deny within 120 days, with denials providing written explanations.
Applicants can appeal denials through a 30-day hearing request and receive a final determination within 60 days.
The proposal provides a temporary safe harbor for applications submitted before the GENIUS Act’s effective date, allowing waivers of certain statutory requirements for up to 12 months.
The FDIC is seeking public comment on the rule’s information-collection requirements.
Source: https://cryptobriefing.com/fdic-payment-stablecoins-rule-proposal/
