By This Hour Finance Desk

The Federal Reserve Board has requested public comment on two proposed rules that would begin to set the operating framework for payment stablecoin issuance by institutions under its supervision. The proposals, announced on September 24, 2026, address both the financial safeguards expected of issuers and the route certain Board-supervised banks would use to seek approval for a subsidiary to issue a payment stablecoin.

The paired proposals matter because they divide the task of supervision into two connected questions. One concerns the resources, controls and activities around a stablecoin once it is issued. The other concerns whether an applicant has provided the Board enough information to decide on a proposed issuance arrangement. Together, they describe a framework in which reserve backing, capital, risk management, custody and bank permissions are considered alongside a formal approval process.

Neither proposal is a final rule. The Board is seeking views from the public, and the eventual terms could change after comments are reviewed. The comment window is scheduled to end 60 days after the relevant notices are published in the Federal Register, making publication—not the date of the press release—the event that starts the stated deadline.

Reserve backing would sit at the center of the first proposal

The first proposal would require Board-supervised payment stablecoin issuers to maintain full backing for their coins using permissible reserve assets. The Board identified short-term U.S. Treasury bills as an example and referred more broadly to certain other high-quality, liquid assets. That formulation makes the composition and availability of reserves a central feature of the contemplated regime, rather than treating backing as a broad principle without specified asset categories.

Full backing is described in the proposal as a requirement for the supervised issuers within its scope. The available announcement does not set out the detailed asset tests, operational mechanics for holding the reserves, or the full range of assets that would qualify. Those omissions matter when assessing the practical reach of the proposal: a standard can turn not only on whether reserves exist, but also on which assets are permitted and how readily they can be used for the purpose required by the rule.

The proposal would also introduce standardized capital requirements aimed at certain credit and operational risks associated with payment stablecoin activities. The announcement distinguishes those capital requirements from reserve backing. Reserves would concern the assets supporting the stablecoins, while capital requirements would address identified risks attached to the activity. The Board has not, in the material supplied, specified the calibration of those capital requirements or how they would apply across differing business models.

Risk-management standards would form another part of the same proposal. The Board said those standards would be established in accordance with the GENIUS Act. Read together with the reserve and capital provisions, the proposal appears designed to make several safeguards part of the regulatory structure: eligible assets behind the stablecoin, capital for stated categories of risk, and management standards for the activity itself. The exact requirements, including documentation, controls or supervisory expectations, are not detailed in the announcement.

Custody and bank activities are included in the proposed framework

The first proposal reaches beyond the issuer’s own balance of reserves. It would create rules for Board-supervised firms that safekeep the assets backing payment stablecoins. This aspect places attention on the firms holding or protecting the reserve assets, not solely on the entity associated with issuance. It also signals that the Board’s proposed framework would cover relationships around the backing assets as well as the issuer’s direct obligations.

In addition, the proposal would clarify whether stablecoin-related activities are permissible for Board-supervised banks. The announcement does not identify every activity covered by that clarification, nor does it state which activities would be permitted, restricted or subject to particular conditions. But the inclusion of this question means the proposal is not limited to a reserve rule. It also addresses the boundaries within which supervised banks may take part in stablecoin-related business.

That distinction is consequential for institutions evaluating the proposals. A bank could need to consider its own potential activities separately from an issuer’s reserve and capital obligations, while a firm safeguarding reserve assets could face another set of rules. The Board’s notice, as summarized in the supplied material, therefore presents a framework that separates several roles: issuer, supervised bank and reserve-asset safekeeper. The details of how those roles may overlap have not been provided.

The design also avoids reducing supervision to a single measure of backing. The Board’s outline combines asset requirements with capital standards, risk management, rules for safekeeping firms and clarification for bank activities. That breadth may shape the comments the Board receives, because respondents can address not only the principle of full backing but the interaction among requirements that may apply to different participants or functions.

A separate proposal would govern applications by supervised banks

The second proposal would establish a tailored application process for Board-supervised banks seeking approval to issue payment stablecoins. More precisely, the identified Federal Register notice concerns Board-supervised insured depository institutions seeking approval for a subsidiary to issue payment stablecoins. The distinction between a bank and a subsidiary is significant in the proposal’s stated scope, because it frames the approval path around a particular institutional arrangement rather than an undifferentiated permission for any entity to issue a coin.

Applicants would have to submit a business plan, financial information and other documents. The announcement does not describe the precise contents of the plan, the financial measures to be supplied or the complete set of accompanying documents. Still, the stated submission requirements indicate that approval would be based on a defined record rather than a simple notice that an institution intends to enter the activity.

The application proposal would also establish procedures for appeals, hearings and final determinations. Those steps would give the process an administrative structure beyond the initial filing. The Board’s announcement does not say how long decisions would take, what standards would govern particular outcomes, or under what circumstances a hearing or appeal would occur. Those are among the operational questions that commenters may wish to examine when the notices are available in the Federal Register.

Considered alongside the first proposal, the application process appears to connect entry into payment stablecoin issuance with ongoing regulatory expectations. An institution seeking approval would need to furnish information about its plan and finances, while the substantive framework would address backing, capital, risk controls, safekeeping and permitted activities. The press release does not state whether satisfying an application requirement by itself would establish compliance with every ongoing obligation. Nor does it state how the Board would sequence approval decisions and supervision after issuance begins.

Comments may focus on the unresolved operating details

The Board has characterized both measures as proposals, and its request for comment creates the formal opportunity for affected institutions and other members of the public to respond before any rules are finalized. The supplied material gives a high-level description of the intended architecture, but not the full proposed regulatory text. The two referenced Federal Register notices and Board materials are the primary documentation identified for the proposals.

Several questions remain open from the announcement alone. It does not state the complete list of permissible reserve assets, the quantitative level or method for standardized capital requirements, or the detailed risk-management standards. It does not explain the specific duties for firms that safekeep reserve assets. It also leaves unspecified the full evidence expected in applications, the standards for final determinations and the procedures by which appeals and hearings would operate.

Those uncertainties do not negate the Board’s stated direction. They identify the difference between a proposal’s announced components and the detailed rule language that would determine implementation. For financial institutions, issuers and firms involved in safekeeping reserve assets, that difference could affect the compliance work needed if final rules are adopted. No market-price figures, company earnings information or market reaction were supplied with the announcement, so this report does not characterize an investor response.

The report is based on a single Federal Reserve Board announcement and has not been independently corroborated. The Board’s release is primary documentation of its stated request for comment, but the available material does not independently establish how stakeholders will respond, whether the proposals will be revised, or when any final framework might take effect.

For now, the documented next step is publication of the relevant notices in the Federal Register, followed by the 60-day comment period specified by the Board. The public record generated through that process may clarify the technical terms that the announcement leaves open and show where commenters support, question or seek changes to the proposed framework.

For further context on this subject, see SEC Updates Market Statistics With Reported Rise in IPO Activity and Proceeds.

Reporting notes

What is confirmed: The Board says comments will close 60 days after the relevant Federal Register notices are published.

Why this matters: The proposals pair reserve, capital and risk requirements with an approval route for certain supervised banks.

What remains unclear: Detailed reserve eligibility, capital calibration, application standards and final rule timing were not provided. This report is based on one source and has not been independently corroborated.

Sources