American Banks Get Pathway to Issue Stablecoins Under New FDIC Framework

The regulatory landscape for blockchain-based payments is shifting rapidly. The Federal Deposit Insurance Corporation announced a fresh regulatory blueprint enabling U.S. banks to issue payment stablecoins, marking a tangible step forward in implementing the GENIUS Act that passed earlier this year.

How Banks Can Enter the Stablecoin Market

Rather than imposing rigid restrictions, the FDIC rolled out a proposal that allows supervised banks to apply for stablecoin issuance through subsidiary entities. The framework invites public feedback before finalization, suggesting regulators are open to industry input during this critical phase.

Banks pursuing this path must submit comprehensive applications detailing how their stablecoins operate. The FDIC’s evaluation will prioritize several dimensions: safety mechanisms, operational soundness, governance structures, and risk management protocols. Approval hinges on demonstrating that these elements meet federal standards.

Travis Hill, the Acting FDIC Chair, emphasized that the regulatory approach aims for customization rather than one-size-fits-all restrictions. The agency intends to assess potential risks while avoiding unnecessary friction for legitimate applicants.

What Applicants Must Demonstrate

The proposal sets clear expectations for issuers. Banks need to clarify ownership structures, operational strategies, and how they’ll maintain reserves. Critically, applicants must engage registered public accounting firms to validate their processes, ensuring transparency in stablecoin backing.

The FDIC will evaluate whether proposed stablecoin activities pose risks to overall financial stability. Applications won’t face automatic rejection unless regulators conclude the plans are fundamentally unsafe or operationally unsound. Notably, if the agency doesn’t respond within a specified timeframe, applications may receive default approval.

Ongoing Supervision and Compliance

Once approved, stablecoin issuers face ongoing regulatory scrutiny. The framework mandates compliance with capital and liquidity standards, comprehensive risk-management requirements, and strict anti-money-laundering protocols. Sanctions screening compliance is also non-negotiable.

Large financial institutions are already exploring this terrain. Major banks have tested stablecoin partnerships for payment settlement, signaling strong market interest in this regulated approach to digital currency issuance.

This move represents a watershed moment for institutional cryptocurrency adoption, bridging traditional banking infrastructure with emerging blockchain payment systems under clear federal oversight.