FDIC Proposes Application Process For GENIUS Act Compliance

The FDIC released a proposed rule that would establish an application process for FDIC-supervised banks to issue "payment stablecoins" through a subsidiary pursuant to the GENIUS Act. The federal banking agencies and the NCUA must develop implementing regulations under the GENIUS Act, which becomes effective on January 18, 2027, or 120 days after primary regulators issue final implementing rules, whichever comes first. The FDIC's proposed rule is the first out of the gate.

The proposed rule would create a more expedited federal process for subsidiaries of FDIC-supervised banks to become "permitted payment stablecoin issuers" (PPSIs) under the GENIUS Act. The proposed rule would apply to insured state-chartered non-member banks, including industrial loan companies, and state-chartered savings associations. While these institutions do not make up the largest assets in the U.S. financial system, the FDIC explained that there are 2,772 insured state nonmember banks and