The regulatory "shoe" has dropped! The US FDIC will launch the stablecoin GENIUS bill implementation framework this month.

The U.S. financial regulation takes a key step forward. Federal Deposit Insurance Corporation (FDIC) Acting Chairman Travis Hill announced that a proposal for the implementation framework of the GENIUS Act (the National Stablecoin Innovation and Establishment Act) will be officially submitted later this month. The bill was signed into law by President Trump in July of this year, aiming to establish the first comprehensive federal stablecoin regulatory framework. According to Hill's congressional testimony, the FDIC will be responsible for regulating and licensing subsidiaries of its regulated institutions that apply to issue stablecoins, and will set standards for capital, liquidity, and reserve assets. This marks a shift in the U.S. regulatory approach towards the most core payment settlement layer in the crypto ecosystem—stablecoins—from legislation to substantive enforcement operations.

The GENIUS Act and the Role of the FDIC: A New “Birth Certificate” for Stablecoins

After years of legislative wrangling, the United States has finally ushered in a clear federal roadmap for stablecoin regulation. The “GENIUS Act” (full name “Guiding and Establishing National Innovation for U.S. Stablecoins Act”), which took effect in July this year, ended the long-standing “gray area” status of stablecoin regulation. The core objective of this legislation is to establish a unified federal regulatory framework for stablecoin issuers wishing to operate in the United States, thereby ending the chaotic situation of inconsistent state regulations and rampant regulatory arbitrage.

Under this new framework, the role of the FDIC has been redefined. As a federal agency that provides insurance for bank deposits and oversees thousands of banks, the FDIC will be responsible for approving and continuously supervising bank subsidiaries under its regulation that wish to issue stablecoins. This means that entities looking to compliantly issue stablecoins pegged to fiat currencies like the US dollar will likely need to obtain an FDIC “license” or “permission” first. Hill explicitly stated in the testimony provided to the House Financial Services Committee that the FDIC will establish specific capital requirements, liquidity standards, and reserve asset diversification standards for such issuers. In short, the FDIC is designing a set of prudential regulatory rules for the stablecoin industry similar to those in traditional banking, aimed at ensuring that the issuance of these “digital dollars” has sufficient solvency and risk resistance.

This transition is far-reaching. It marks the formal inclusion of certain stablecoins (especially payment stablecoins issued by regulated banking institutions) into the traditional financial safety net and regulatory view of U.S. regulators. For issuers, gaining FDIC regulation, while it means higher compliance costs and capital constraints, will also bring unprecedented legitimacy and credibility, which is expected to attract a broader range of institutional users and retail investors.

Key Nodes and Responsibilities for the Implementation of the GENIUS Act

Full Name of the Bill: “United States Stablecoin National Innovation and Establishment Act” (GENIUS Act)

Signing into Law: July 2025

One of the key regulatory agencies: Federal Deposit Insurance Corporation (FDIC)

Core Responsibilities of the FDIC: License and supervise subsidiaries of its institutions that issue stablecoins; establish relevant capital, liquidity, and reserve requirements.

Plan for this month (December): Release proposed rules regarding the application framework.

Plans for early next year (2026): Release proposed rules for specific prudential requirements for stablecoin issuers.

Other participating institutions: Federal Reserve (Fed), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA), Department of the Treasury, etc.

Long-term goal: Establish a comprehensive regulatory system for stablecoins in collaboration with the federal and state governments.

Regulatory Roadmap Emerges: From Application Framework to Prudential Requirements, Timeline Clarified

With the release of testimony from FDIC Acting Chair Hill, a clear timeline for the implementation of the GENIUS Act's regulations has been made public for the first time. According to the plan, the FDIC will adopt a “two-step” strategy to steadily advance the new regulations. The first step, expected later this month, will see the FDIC release a proposed rule focusing on establishing an application framework for stablecoin issuers. This document will detail how institutions can submit applications to the FDIC, what preliminary conditions need to be met, and how the entire approval process will work. This essentially serves as the first “action map” for institutions looking to enter the field.

The second step is even more critical. It is expected that at the beginning of next year, the FDIC will release another “proposed rule” aimed at specifically implementing the “prudent requirements” for payment stablecoin issuers as stipulated in the GENIUS Act under FDIC regulation. This part will directly touch on the core of the industry, including but not limited to: how much capital the issuers must hold (capital adequacy ratio), what level of liquid assets must be maintained to respond to redemptions (liquidity coverage ratio), and the composition and quality requirements of the reserve assets supporting the value of the stablecoin (such as cash, short-term government bonds, etc.) (diversification standards for reserve assets). These rules will fundamentally determine the business model and cost structure of compliant stablecoins.

It is important to note that, according to the rule-making process of U.S. federal agencies, these two “proposed rules” will enter a public comment period lasting several months after their release. Industry organizations, legal experts, the public, and other parties can submit comments. The FDIC will only publish the final version of the rules after summarizing and analyzing all comments received. Following this, there is usually a longer “effective transition period” to allow regulated entities ample time to adjust and prepare. Therefore, the transition from proposed rules to full enforcement will still be a gradual process measured in “years.” However, there is no doubt that the release of the proposed application framework this month will be a milestone starting point in this long process.

Market Impact Outlook: How Will the Compliance Wave Reshape the Stablecoin Landscape?

The gradual implementation of the GENIUS bill regulatory framework is expected to have a profound structural impact on the stablecoin market worth hundreds of billions of dollars. The first to bear the brunt is the potential further increase in market concentration. Strict capital and compliance requirements effectively set a high barrier to entry for the industry. Large, financially strong existing fintech companies or traditional banking institutions will have an advantage over smaller startups in obtaining FDIC approval. This could lead to a further concentration of market share among a few compliant, federally regulated large stablecoins, such as PayPal USD (PYUSD), which may be licensed in the future, or new stablecoins issued by large banks.

Secondly, the “layering” of stablecoins will become clearer. There may be a distinct differentiation in the market: one layer consists of “fully compliant stablecoins” that are comprehensively regulated by the FDIC, have transparent reserves that are audited, and enjoy the highest level of legal certainty; the other layer may consist of “other stablecoins” that operate under state-level licensing or choose not to issue directly in the United States but serve overseas markets. The former will primarily attract institutional investors, traditional enterprises, and mainstream payment scenarios that have very high requirements for regulation and security; the latter may continue to be active in areas such as DeFi, pursuing efficiency and non-U.S. markets. Existing giants like USDC and USDT will face critical strategic choices about whether and how to adjust their structures to meet federal regulatory requirements.

In addition, Hill revealed another equally important signal in his testimony: the FDIC is developing guidelines regarding the regulatory status of “tokenized deposits” based on the recommendations of the President's Digital Asset Market Working Group. This indicates that the regulatory perspective is not limited to independent stablecoins but also includes innovations in the banking sector utilizing blockchain technology for the digitization of their liabilities (deposits). This opens up a compliance pathway for a deeper integration of the traditional banking system with blockchain, which, in the long run, may create a complex relationship that is both competitive and complementary with privately issued stablecoins.

Global Regulatory Competition: How Will the US “Framework” Impact the International Landscape?

The advancement of the implementation framework of the U.S. GENIUS Act is not only a domestic event but also an important step in the global competition for cryptocurrency regulation. In recent years, the European Union has taken the lead in establishing a comprehensive regulatory framework for cryptocurrency assets through the MiCA (Markets in Crypto-Assets Regulation), which imposes strict reserve and licensing requirements on stablecoins, particularly “electronic money tokens.” The United Kingdom, Singapore, Japan, and other regions are also actively formulating their own regulatory rules for stablecoins.

The recent actions by the United States signify that the world's largest economy is completing a crucial piece of the institutional puzzle. A clear and predictable federal regulatory framework is expected to attract global stablecoin issuance, trading, and related financial services back to or concentrated in the United States, enhancing the competitiveness of financial centers like New York. This also creates preconditions for other countries to collaborate with the United States on cross-border regulatory cooperation and mutual recognition of standards. For example, a dollar stablecoin regulated by the FDIC in the future may find it easier to gain recognition from the EU or other jurisdictions, thereby promoting its circulation and use globally.

However, challenges also exist. The multi-tiered regulatory system (federal and state) and the overlapping responsibilities of multiple agencies (FDIC, Federal Reserve, OCC, SEC, etc.) may still complicate the compliance path. The effectiveness of the bill's implementation ultimately depends on the rationality of the rules themselves, the consistency of enforcement, and the market's acceptance. Nonetheless, as the FDIC takes the first step in proposing rules this month, the global encryption industry, especially the stablecoin sector, can already clearly hear the rumbling sound of the U.S. regulatory gears beginning to turn.