What happened

On 24 September the Federal Reserve published two proposals under the GENIUS Act. The first requires the stablecoin issuers it supervises to back their coins fully with permitted reserve assets, "such as short-term Treasury bills and certain other high-quality, liquid assets", and adds standardised capital and risk-management requirements. The second sets out how Fed-supervised banks apply to issue a payment stablecoin[1].

The Fed was the last to publish. The OCC and NCUA proposed their rules in February, the FDIC in April and the Treasury in August[2]. The statute had asked for rules by July, and that deadline was missed.

Why it matters

The date that matters is not in any of these proposals. The Act takes effect on the earlier of 18 January 2027 or 120 days after final rules are issued[3]. With a 60-day comment period that starts only on Federal Register publication, the Fed cannot finalise in time to bring that date forward. So from 18 January issuers need a federal or state licence[4], and the rules they will be licensed under are still drafts.

The market is not waiting for them. Adjusted stablecoin transaction volume, on Visa's measure, reached $8.82 trillion in the first half of 2026, against $10.8 trillion for the whole of 2025[5].

What most people are missing

The commentary frames this as crypto against banks. I think that is the wrong fight. The FDIC has already proposed that tokenised deposits meeting the statutory definition of a deposit be treated "no differently" from any other deposit[6]. A bank can therefore put money on-chain in two ways. One is a stablecoin, fully reserved in T-bills, which cannot pay holders interest just for holding it[7] and which takes funding off the balance sheet. The other is a tokenised deposit, which keeps the funding, the insurance and the lending economics. For most banks that choice decides the business case, and I rarely see it named in a board paper.

Second, the competition has a much lower cost of entry. This month the OCC conditionally approved three national trust charters for stablecoin and AI-payments firms, with minimum Tier 1 capital of $6 million to $10 million[8]. They do not need to win deposits. They only need to sit in the settlement path that a bank's corporate clients already use for treasury and cross-border flows.

Third, the rulebook comes from five authors. Governor Barr supported the reserve and capital elements but warned that "further work will undoubtedly be required if stablecoins are to be reliable payment instruments"[9]. If the drafts diverge, issuers will pick the lightest supervisor, and banks will be the ones held to the heaviest.

What to do on Monday

  • Put the token-against-deposit decision on the next ALCO agenda. Model the funding cost if part of your corporate operating balances moved into third-party stablecoins, at several migration rates, and compare it with the build cost of tokenised deposits.
  • Read all five drafts side by side. Map where the reserve, redemption and capital requirements differ, and file comments before the Fed's window closes. Most banks will not comment. The ones that do will help shape the final rules.
  • Pick a lane for 18 January. That means a subsidiary issuer, a partnership with a licensed issuer, or tokenised deposits for named corporate clients. Brief the board on which one you chose and why.
  • Test your core against on-chain settlement. If your core cannot post and reconcile a 24/7 token movement in real time, the choice above is academic.