U.S. Banks Get Green Light to Issue Stablecoins as FDIC Implements GENIUS Act

The Federal Deposit Insurance Corporation (FDIC) has taken a significant step toward implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act by approving a notice of proposed rulemaking on December 16, 2025. The proposal outlines an application process for FDIC-supervised banks to seek approval to issue payment stablecoins through dedicated subsidiaries.

Signed into law by President Donald Trump in July 2025, the GENIUS Act—the first major U.S. cryptocurrency legislation—establishes a federal framework for dollar-backed payment stablecoins. It requires issuers to maintain 1:1 reserves in high-quality liquid assets, such as cash, short-term Treasuries, or insured deposits, while imposing strict transparency, audit, and anti-money laundering requirements.

Under the FDIC’s proposed rule, state nonmember banks and savings associations would submit detailed applications for subsidiary approval. The agency would evaluate factors including financial condition, management quality, risk controls, and compliance with the Act’s safety standards. Applications deemed complete would receive a decision within 120 days, with an appeals process for denials. The proposal opens a 60-day public comment period before finalization.

Acting FDIC Chairman Travis Hill emphasized that the tailored process balances innovation with safety and soundness, minimizing regulatory burden. Additional rules on capital, liquidity, and risk management are expected in early 2026.

The move signals growing integration of stablecoins into traditional banking, potentially enabling faster payments and cross-border transactions while reducing risks seen in unregulated issuers. Analysts say it could boost U.S. competitiveness in digital finance amid global regulatory races.

However, critics highlight potential challenges for non-bank crypto firms and ongoing debates over privacy and decentralization. As regulators advance implementation, banks may soon enter the stablecoin market under federal oversight, bridging traditional finance and digital assets.