In a landmark move for the integration of digital currencies into traditional finance, the Federal Deposit Insurance Corporation (FDIC) has proposed its first rule under the GENIUS Act. This initiative aims to pave the way for stablecoins to be issued by banks under FDIC supervision, marking a significant regulatory development in the evolving landscape of cryptocurrency, as emphasized in the official statement.
Overview of the Proposal
The proposal, issued on December 16, 2025, outlines a structured pathway for FDIC-supervised banks to issue stablecoins through regulated subsidiaries. This is the first regulatory output following the passage of the GENIUS Act earlier this year, highlighting the government's commitment to embracing digital assets within the banking framework.
Permitted Payment Stablecoin Issuer (PPSI)
Under the proposed rule, state nonmember banks and state savings associations can apply to become a Permitted Payment Stablecoin Issuer (PPSI). The FDIC has emphasized a comprehensive application process that will assess various factors, including:
- reserves
- capital strength
- liquidity planning
- governance structure
- anti-money laundering controls
Decision Timeline and Future Regulations
A notable feature of the proposal is the 120-day decision deadline for the FDIC, which stipulates automatic approval if no action is taken within that period. Additionally, a formal hearing and appeals process will be available for applicants whose requests are denied. The FDIC has indicated that this proposal is merely the first step, with more detailed regulations anticipated in early 2026.
In light of the recent FDIC proposal for stablecoin issuance, Kevin O'Leary discussed the potential impact of the US Clarity Act on cryptocurrency investment. For more insights, see read more.
