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ARTICLE · 04 NOVEMBER 2025

Federal Reserve Governor Barr Highlights Gaps Regulators Must Bridge Under GENIUS Act

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On October 16, Federal Reserve Governor Michael Barr delivered remarks highlighting the significant implementation gaps regulators must bridge under the GENIUS Act, the newly enacted federal framework for payment stablecoins.

United StatesTechnology

On October 16, Federal Reserve Governor Michael Barr delivered remarks highlighting the significant implementation gaps regulators must bridge under the GENIUS Act, the newly enacted federal framework for payment stablecoins (previously discussed here).Barr's comments centered on areas where the statute leaves critical details to regulators, including reserve composition, supervisory authority, and consumer safeguards, which will determine whether the framework effectively mitigates systemic and operational risks.

Barr identified several areas requiring close regulatory coordination to ensure the framework functions as intended:

  • Reserve asset oversight. Although the act limits permissible reserve assets to highly liquid instruments, as drafted, the act may permit holdings such as uninsured deposits and foreign-currency or digital-asset repos to back stablecoin deposits, which may expose issuers (and thus depositors) to losses during market stress.

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