Fed proposes application rules for banks to launch payment stablecoins
Insured State member banks must follow the new process to obtain Board approval for a subsidiary to issue payment stablecoins, with comments due by Nov. 30, 2026.
The Board of Governors of the Federal Reserve System issued a notice of proposed rulemaking (Docket No. R-1900, RIN 7100-AH30) to add subpart D to Regulation UU in 12 CFR part 247. The proposal would create a tailored application process for an insured State member bank that seeks Board approval for a subsidiary to issue payment stablecoins under the GENIUS Act.
The rule applies only to insured State member banks; uninsured banks are excluded. It adopts the GENIUS Act definition of a payment stablecoin as a digital asset designed for payment or settlement that must be redeemable for a fixed monetary amount and expected to maintain a stable value. The Board would supervise the subsidiary as a Board-supervised permitted payment stablecoin issuer.
Applicants must submit a substantially complete application containing the information outlined in the proposal. Upon receipt, the Board must render a decision within 120 days. The framework provides for a safe harbor while an application is pending, an opportunity for a hearing, and an appeal process for any denial.
The Board states the rule is intended to evaluate the safety and soundness of the applicant and its proposed subsidiary while minimizing unnecessary regulatory burden. Separate proposed regulations will address prudential requirements for such issuers.
Comments on the proposal must be received by the Board on or before November 30, 2026. Submissions may be made through the Board's website, by mail to Benjamin W. McDonough, Secretary, or by other electronic means as specified in the notice. All comments are subject to public disclosure.
Further reading