Banks can now see how the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. propose to supervise their digital dollars. The next decision is which banks can make a business of issuing them.
The proposals also bring stablecoins into the familiar bank strategy discussion of the choice of charter and regulator. A national bank issuing through a subsidiary would work principally with the OCC. An FDIC-supervised state bank would follow the FDIC’s process, while a Federal Reserve-supervised state member bank would use the Fed’s. All three agencies are implementing the GENIUS Act, but each is setting out its own approval and supervisory requirements.
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Under the Fed’s proposal, supervised issuers would have to fully back their payment stablecoins with eligible assets, including short-term Treasury bills and other highly liquid holdings. The Fed also proposed capital and risk management standards and rules for firms safeguarding the reserves. A separate proposal would require banks seeking approval for an issuing subsidiary to submit a business plan and financial information. Both proposals remain open for comment.
The OCC proposed its framework in February. It covers reserves, redemption, custody, applications, reporting and supervision for issuers under its authority, including subsidiaries of national banks. In June, the agency also proposed weekly and quarterly reporting forms.
The FDIC’s April proposal addresses reserves, redemptions, capital, risk management and custody for issuers it supervises. It follows a separate FDIC proposal from December on how insured banks would apply to issue stablecoins through subsidiaries. The April proposal also addresses insurance treatment for deposits held as stablecoin reserves and clarifies that a tokenized deposit remains a deposit if it meets the legal definition.
Those details could eventually affect how a bank structures its stablecoin business. An issuer will have to weigh the cost of holding reserves, maintaining capital, arranging custody, filing reports, and running payments and redemptions around the clock. Differences in application procedures or supervisory expectations could influence a bank’s choice of issuing entity. It is too early to say whether the final rules will differ enough to prompt banks to change charters.
Commercial demand will be just as important. SoFi Technologies said this week that stablecoin settlement using its bank-issued SoFiUSD is live for its Mastercard debit and credit card program, which it expects to process more than $25 billion in annualized volume, PYMNTS reported.
U.S. Bank completed a live cross-border pilot using its USBDC stablecoin.
As the rules take shape, banks will have a clearer way to price the work of issuing digital dollars. The strongest candidates may be those with enough card payments, treasury customers or cross-border activity to put their coins to regular use. The regulatory path is coming into view; the economics will determine how many banks take it.
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