Payment Stablecoins Get Green Light: How U.S. Banks Can Now Apply for FDIC Approval

The regulatory landscape for bank-issued stablecoins just shifted dramatically. Following months of anticipation since the GENIUS Act became law, the Federal Deposit Insurance Corporation has finally released a concrete pathway for U.S. banks to enter the stablecoin market through official channels.

The GENIUS Act’s First Real Implementation Step

The FDIC’s proposed rulemaking represents the first tangible regulatory framework emerging from the GENIUS Act legislation signed earlier this year. Rather than leaving banks in regulatory limbo, the FDIC board has outlined exactly what federally-supervised institutions need to do to launch their own payment stablecoins. The framework emphasizes that banks will operate stablecoin issuance through subsidiaries, creating a clear legal and operational separation.

What Banks Must Submit to Get Approved

If you’re curious about what the application process actually looks like, here’s what institutions need to prepare:

Core documentation requirements:

• Detailed ownership structures and governance models
• Comprehensive operational strategies for stablecoin management
• Reserve procedures demonstrating 100% backing with fiat or liquid equivalent assets
• Formal engagement letters from registered public accounting firms

Travis Hill, the Acting FDIC Chair, emphasized that the agency’s evaluation will remain balanced—rigorous enough to protect financial stability without creating unnecessary friction for applicants. The regulator will scrutinize safety, soundness, risk controls, and governance frameworks, but won’t reject applications arbitrarily.

What Actually Happens During Review

The FDIC will conduct a thorough risk assessment examining whether stablecoin issuance poses threats to broader financial stability. One unique aspect of this framework: if regulators fail to respond within specified timeframes, applications could receive automatic approval—a provision designed to prevent indefinite regulatory delays.

Large financial institutions are already positioning themselves for this opportunity, exploring how payment stablecoins could enhance their services and operational efficiency.

Post-Approval Oversight

Once approved, issuers won’t operate unsupervised. The FDIC will enforce ongoing requirements including capital and liquidity standards, risk-management protocols, and compliance with anti-money-laundering and sanctions regulations. This dual approach—easier entry combined with rigorous ongoing supervision—creates accountability while encouraging innovation.

The GENIUS Act established a federal framework for payment stablecoin regulation, and this FDIC proposal transforms that legislative intent into workable operational reality for U.S. banks.