On April 9, 2026, the Federal Deposit Insurance Corporation (“FDIC”) issued a Notice of Proposed Rulemaking (the “FDIC Proposal”) to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”) for the issuance of payment stablecoins and certain related activities by entities subject to the FDIC’s jurisdiction.
The FDIC Proposal generally tracks a similar proposal that the Office of the Comptroller of the Currency (“OCC”) issued earlier this year for entities subject to OCC regulation (the “OCC Proposal”), with certain notable deviations. Additionally, the FDIC Proposal addresses the eligibility of stablecoin reserves for pass-through deposit insurance and tokenized deposits for deposit insurance.
Comments on the FDIC Proposal are due no later than June 9, 2026. In this Legal Update, we provide background on the GENIUS Act implementation and discuss some of the notable differences between the FDIC Proposal and the OCC Proposal.
BACKGROUND
The GENIUS Act, signed into law on July 18, 2025, establishes a federal regulatory framework for payment stablecoins and restricts their issuance to permitted payment stablecoin issuers (“PPSIs”). The GENIUS Act creates three pathways to become a PPSI:
- A subsidiary of an insured depository institution (“IDI”) approved by its primary federal regulator
- A “Federal qualified payment stablecoin issuer” (“FQPSI”) approved by the OCC
- A “State qualified payment stablecoin issuer” (“SQPSI”) approved by a state regulator
Additionally, the GENIUS Act creates a path for payment stablecoin issuers who are not based in the United States (“FPSIs”) to continue circulating their stablecoins among US persons. Each primary federal payment stablecoin regulator must promulgate implementing regulations by July 18, 2026. The GENIUS Act takes effect on January 18, 2027, or 120 days after final implementing regulations are issued, if earlier.
In December 2025, the FDIC issued the first agency-specific implementing rulemaking, proposing an application process for subsidiaries of FDIC-supervised IDIs. As noted above, in February 2026, the OCC issued the OCC Proposal to regulate stablecoin activities by national banks, federal savings associations, federal branches, and their subsidiaries, as well as nonbank entities seeking FQPSI status, FPSIs, and certain SQPSIs who would be subject to OCC authority (“OCC PPSIs”). While the FDIC Proposal primarily addresses the stablecoin activities of subsidiaries of FDIC-supervised IDIs (“FDIC PPSIs”), it also would address deposit insurance eligibility for any stablecoin reserves held by an IDI and tokenized deposits.
FDIC PROPOSAL VS. OCC PROPOSAL
Please see our earlier Legal Update for a comprehensive discussion of the OCC Proposal. Below we highlight some of the key differences between the FDIC Proposal and the OCC Proposal.
PASS-THROUGH DEPOSIT INSURANCE
A PPSI must maintain identifiable, eligible reserves backing outstanding payment stablecoins on at least a one-to-one basis. Eligible reserves include funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) or insured shares at an IDI (including any foreign branches or agents, including correspondent banks, of an IDI).
The FDIC generally insures deposits at an IDI up to a maximum of $250,000 per depositor for each account ownership category for which the depositor has accounts at the IDI. However, if (i) an agent deposits funds at an IDI in its own name but acting on behalf of a principal and (ii) the deposit account records of the IDI recognize the existence of the agent-principal relationship, then the principal’s deposits will be insured to the same extent as if they had been deposited by the principal in the principal’s own name. This concept is known as “pass-through” deposit insurance because it permits the deposit insurance coverage limits to pass through the agent and be applied at the level of the principal.
The GENIUS Act provides that payment stablecoins may not be subject to FDIC deposit insurance. However, the GENIUS Act is silent on whether reserves deposited by a PPSI with an IDI in a deposit account may qualify for pass-through deposit insurance (i.e., treating the PPSI as the agent of the stablecoin holder).
The FDIC Proposal states that the prohibition against direct deposit insurance of payment stablecoins seems to be inconsistent with providing deposit insurance to payment stablecoin holders on a pass-through basis. Therefore, the FDIC Proposal would amend the deposit insurance coverage rules to clarify that deposits held as reserves for a payment stablecoin are not insured to payment stablecoin holders on a pass-through basis. Instead, such deposits would be treated as deposits of the PPSI. This would mean that the deposits would be insured up to $250,000 with respect to the PPSI, instead of being insured up to $250,000 with respect to each of the stablecoin holders.
FDIC PROPOSAL AND TOKENIZED DEPOSITS
The FDIC Proposal also addresses the treatment of tokenized deposits under the Federal Deposit Insurance Act (“FDI Act”), which the GENIUS Act expressly excludes from the definition of “payment stablecoin.”
The FDIC Proposal would amend the deposit insurance rules to clarify that the availability of deposit insurance does not depend on the technology or recordkeeping used to record a bank’s deposit liabilities. Under this approach, an IDI’s tokenization of its deposit liabilities would not alter the legal status of those liabilities as “deposits” under the FDI Act, and depositors using tokenized deposits would be entitled to the same deposit insurance coverage as depositors using traditional forms of deposits.
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