Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—FDIC takes first steps to implement the GENIUS Act, (Dec 16, 2025)
The FDIC has proposed a rule that would implement the GENIUS Act with respect to evaluating applications for the issuance of payment stablecoins in the United States.
At its latest meeting, the Board of Directors of the Federal Deposit Insurance Corporation approved a notice of proposed rulemaking that would implement Section 5 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) with respect to evaluating and processing applications for the issuance of payment stablecoins.
Comments on the proposed rulemaking must be received by the FDIC no later than 60 days from the date of publication in the Federal Register.
Under the GENIUS Act, the FDIC, as well as the other primary Federal payment stablecoin regulators, are directed to establish a process and federal framework for the licensing, regulation, examination, and supervision of permitted payment stablecoin issuers (PPSIs) that prioritizes the safety and soundness of such entities.
The FDIC’s proposed rule would establish procedures under a new 12 C.F.R. §303.252 titled “Permitted payment stablecoin issuers.” This new section would apply to an FDIC-supervised institution that seeks to issue payment stablecoins through a subsidiary. The proposed rule would establish a tailored application process that minimizes the regulatory burden on an applicant.
The proposed rule would also define relevant terms, including “applicant,” “digital asset service provider,” “payment stablecoin” and “permitted payment stablecoin issuer,” by referencing the meanings given in the GENIUS Act and the Federal Deposit Insurance Act. From the GENIUS Act, the proposed rule would define “substantially complete” with regard to an application as “an application that contains sufficient information for the FDIC to render a decision on whether the applicant satisfies the factors” described in Section 5(c) of the GENIUS Act.
Letter application. To begin the approval process, an applicant would submit information to the FDIC in the form of a letter application that would contain the information listed in the regulation and not already in the FDIC’s possession as the primary federal regulator of the applicant. Each of the proposed application requirements is tied to the factors to be considered under Section 5(c) of the GENIUS Act.
Processing timelines. The FDIC would then process the application following the requirements and timelines established by the GENIUS Act. The FDIC would notify an applicant as to whether the application is considered substantially complete not later than 30 days after the FDIC receives an application or specifies the additional information required for the FDIC to consider the application substantially complete. In addition, the proposed rule would provide that the FDIC shall approve or deny an application not later than 120 days after receiving a substantially complete application. If the FDIC does not render a decision on a substantially complete application within 120 days, the application shall be deemed approved, in accordance with the GENIUS Act.
Appeals process. Finally, the proposed rule would establish a hearing and appeals process following denial of an application. This process would be similar to the process for appeals of material supervisory determinations but within the timelines provided under the GENIUS Act.
What’s next? Acting FDIC Chairman Travis Hill noted, “In the months ahead, we expect to issue a proposed rule to establish the statutorily mandated capital, liquidity, and risk management requirements for subsidiaries of FDIC-supervised institutions that are approved to be PPSIs, 6 among other GENIUS Act-related workstreams. He added, “We will also continue to explore ways to provide regulatory clarity regarding activities related to digital assets and tokenized deposits more broadly.”
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