The Federal Reserve Board on September 24 requested public comment on two proposals that would build the regulatory framework for Board-supervised payment stablecoin issuers under the GENIUS Act. The comment window closes 60 days after the proposals appear in the Federal Register. Nothing in either package is final; both are drafts open to industry input, and the compliance obligations they describe would attach only if and when the Board adopts final rules.

Proposal one: reserves, capital and custody

The first proposal would require Board-supervised payment stablecoin issuers to back their stablecoins fully with a defined set of permissible reserve assets. The Fed names short-term Treasury bills and certain other high-quality, liquid assets as the qualifying categories. Full backing is the operative standard — not a fractional reserve ratio, and not a discretionary buffer.

The same proposal would establish standardized capital requirements. The Fed frames these as addressing credit and operational risks specific to payment stablecoin activities, alongside risk management standards, all drafted to conform to the underlying statute.

A third strand of the first proposal reaches firms that do not issue stablecoins but safekeep the assets backing them. The Fed would set rules for Board-supervised firms providing that custody function. The proposal would also clarify which stablecoin and related activities are permissible for Board-supervised banks — a question that has sat unresolved for institutions weighing whether to enter issuance, custody or adjacent lines of business.

Proposal two: the application pipeline

The second proposal addresses process rather than prudential substance. It would create a tailored application path for Board-supervised banks seeking approval to issue payment stablecoins. Applicants would need to submit a business plan and financial information, among other documents — the Fed's text does not enumerate the full filing set beyond those items.

The proposal also specifies what happens after a filing: a defined process governing appeals, hearings and final determinations on applications. That procedural architecture matters for bank planning. It gives prospective issuers a known review and dispute track rather than an ad hoc supervisory negotiation, which is what the absence of a formal framework has implied to date.

What is mandated, what is proposed

The record supports a clear separation. Mandated today: nothing in either proposal. The GENIUS Act directs the framework; these two documents propose how the Fed would implement it. Proposed: full reserve backing in short-term T-bills and other high-quality liquid assets, standardized capital requirements, risk management standards, custody rules for safekeeping firms, permissibility clarifications for banks, and the application-and-appeals process.

Measured: only the timeline. Sixty days of comment from Federal Register publication, and that publication date has not yet been fixed. Everything else in the release is asserted policy intent, subject to revision through the comment process.

Desk implications

For bank treasury and balance-sheet planning, the reserve definition is the load-bearing element. If finalized as drafted, an issuance business would hold its backing in short-term Treasury bills and comparable high-quality liquid assets — instruments that are also the working inventory of repo, collateral and liquidity desks. The scale of that demand is unknowable until issuers materialize, but the composition is fixed by the proposal's text, and that composition points at the front end of the curve.

For custody and fund services, the safekeeping rules would create a distinct regulated activity around reserve assets, separate from issuance itself. Banks positioned in asset servicing would face a defined rulebook rather than supervisory improvisation.

For any bank considering issuance, the second proposal converts an open question into a process with known inputs — a business plan, financial information — and known recourse through appeals and hearings. Filing strategy can now be built against a published procedure, once the comment period closes and final rules land.

The immediate action item is narrow but firm: comments are due within 60 days of Federal Register publication, and the Fed has invited public input on both packages before it moves to adopt final rules.