FDIC Approves GENIUS Act, Washington, 2023

Washington – A groundbreaking decision was made by the Federal Deposit Insurance Corporation (FDIC) today as they approved a notice of proposed rulemaking under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).

This pivotal move signals the beginning of a new era in financial technology, allowing FDIC-supervised institutions to issue payment stablecoins through a subsidiary. The GENIUS Act, a landmark legislation, has been designed to guide and establish national innovation for U.S. stablecoins.

Under the Act, any state nonmember bank or state savings association seeking to issue payment stablecoins must apply to the FDIC for their subsidiary to be approved as a permitted payment stablecoin issuer. This approval process will ensure that only compliant entities can engage in this emerging financial activity.

The proposed rule aims to implement the requirements of section 5 of the GENIUS Act, focusing on evaluating applications based on statutory factors. It also outlines specific timeframes for processing these applications and establishes an appeal process for any denied applications, ensuring a fair and transparent review.

Comments on the proposed rule will be accepted for 60 days after its publication in the Federal Register, allowing stakeholders to voice their opinions and contribute to shaping this new regulatory framework.

This move by the FDIC is seen as a significant step towards embracing innovation while maintaining financial stability. As the financial world continues to evolve with digital currencies, the GENIUS Act approval could pave the way for a more inclusive and efficient financial ecosystem.