The Federal Reserve Board on September 24, 2026, published two notices of proposed rulemaking establishing capital, reserve, and redemption requirements for payment stablecoin issuers under its supervision. The rules implement the Guiding and Establishing National Innovation for U.S. Stablecoins ...
"Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions." — Michael S. Barr, Governor, Federal Reserve Board
The Federal Reserve Board on September 24, 2026, published two notices of proposed rulemaking establishing capital, reserve, and redemption requirements for payment stablecoin issuers under its supervision. The rules implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law in July 2025, which takes effect January 18, 2027, or 120 days after final rules are issued — whichever comes first.
The proposal introduces a tiered operational-risk capital charge: 2% on the first $20 billion in stablecoins outstanding, 1.5% on the next $30 billion, and 1% on amounts above $50 billion. Issuers must maintain one-to-one reserve backing at all times with eligible assets limited to short-term U.S. Treasury bills, Federal Reserve balances, demand deposits, overnight repo, and tokenized versions of those instruments. Redemptions must settle within two business days.
The Fed is the last of three major U.S. banking regulators to propose GENIUS Act rules, following the Office of the Comptroller of the Currency (OCC) in March 2026 and the Federal Deposit Insurance Corporation (FDIC) in April 2026. Together, these three frameworks define the regulatory architecture for a stablecoin market currently valued at approximately $303 billion. The 60-day public comment period begins upon Federal Register publication.
The proposal establishes two distinct capital requirements for Fed-supervised stablecoin issuers.
Operational-risk capital charge (tiered):
| Stablecoins Outstanding | Capital Charge | |---|---| | First $20 billion | 2.0% | | $20 billion – $50 billion | 1.5% | | Above $50 billion | 1.0% |
Under this structure, an issuer with $80 billion in outstanding stablecoins would hold approximately $1.15 billion in operational-risk capital: $400 million on the first $20 billion, $450 million on the next $30 billion, and $300 million on the remaining $30 billion.
Credit-risk capital charge: A flat 2% applies to reserve assets exposed to credit risk, such as uninsured deposits or undercollateralized reverse repurchase agreements.
Non-reserve revenue charge: A secondary charge equals 25% of the issuer's three-year average revenue from activities unrelated to reserve management.
The declining tier structure favors issuers with large outstanding balances. According to analysis by Startup Fortune, "the capital charge tiers in this proposal are built for institutions with balance sheets like Wells Fargo's, not for a company whose entire business is the stablecoin itself." An issuer at $80 billion outstanding pays an effective blended rate of approximately 1.44%, while an issuer at $15 billion pays the full 2%.
Reserve composition. Issuers must hold reserve assets equal to or exceeding the par value of all outstanding tokens at all times — not on a daily average or end-of-quarter basis. Eligible reserve assets are limited to:
This list explicitly excludes commercial paper, corporate bonds, money market fund shares, and other instruments that some stablecoin issuers have historically held in reserve portfolios.
Redemption requirements. All redemption requests must settle within two business days. The proposal ties this to stress conditions, requiring that stablecoins "be reliably and promptly redeemed at par" including during periods of market stress and strain on individual issuers, according to Governor Barr's statement.
Monthly disclosure. Issuers must publish reserve composition reports monthly, certified by executives and subject to independent audit. This standardizes a practice that major issuers like Circle already follow voluntarily, while establishing a legal obligation for all Fed-supervised participants.
The proposal contains a provision that has received less attention but carries significant economic implications. The Federal Reserve presumes that issuers violate the GENIUS Act's prohibition on paying interest when they compensate affiliates or related third parties that subsequently share returns with token holders, according to reporting by Unchained Crypto.
This captures yield-as-a-service arrangements and white-label partnerships where a stablecoin issuer does not directly pay holders but routes value through intermediary entities. Issuers may challenge this presumption in writing, but the burden of proof falls on the issuer.
The practical effect: business models built on sharing reserve yield with holders face a structural prohibition, unless the yield flows through an entirely unaffiliated entity. This codifies the distinction between stablecoins (no yield) and interest-bearing instruments (subject to securities regulation).
The proposal includes automatic enforcement triggers:
This represents a departure from typical banking supervision, where undercapitalized institutions enter prompt corrective action frameworks that can extend over multiple quarters. The stablecoin framework compresses the remediation window to a single quarter before forced liquidation becomes available to regulators.
The proposal draws a structural line between bank and nonbank stablecoin issuers.
For banks: Insured depository institutions can apply to issue payment stablecoins through subsidiaries. Their existing capital bases absorb the 2% charge with limited marginal impact. A bank with $200 billion in total assets issuing $20 billion in stablecoins would need $400 million in additional operational-risk capital — material but manageable against a diversified balance sheet. JPMorgan already settles approximately $1 billion daily through its JPM Coin system, according to prior company disclosures.
For nonbank issuers: The economics differ substantially. Tether (USDT), with $183.4 billion outstanding and 60.6% market share as of September 2026, is domiciled offshore and does not currently fall under Fed supervision. Circle (USDC), at $74.2 billion and pursuing a U.S. bank charter, would face approximately $1.26 billion in operational-risk capital requirements under the tiered structure. Circle reported $701 million in Q2 2026 revenue but net margins of approximately 22% after paying Coinbase roughly 56% of USDC reserve income under their distribution agreement, according to its public filings.
For Tether specifically: The January 2027 deadline creates a binary outcome. After that date, it becomes unlawful for non-permitted entities to issue payment stablecoins in the United States. Digital asset exchanges may continue offering non-compliant stablecoins until July 2028 under a three-year transition provision. Tether's path to compliance remains unclear — the company has not publicly announced plans to seek a U.S. banking charter or OCC-supervised nonbank license.
The Fed's proposal arrives at a moment of structural maturity in the stablecoin market:
The revenue figures underscore what the Fed is now regulating: a Treasury yield extraction mechanism operating at nation-state scale. Stablecoin issuers collectively hold reserves exceeding the GDP of 140 countries, generating billions in annual income from U.S. government debt instruments.
The Fed's proposal completes a three-agency rulemaking sequence:
| Agency | Proposal Date | Scope | |---|---|---| | OCC | March 2, 2026 | Federal nonbank issuers, uninsured national banks | | FDIC | April 10, 2026 | FDIC-supervised insured depository institutions | | Federal Reserve | September 24, 2026 | Board-supervised banks, state member banks |
Key dates ahead:
Governor Barr flagged one unresolved issue in his statement: the proposal's anti-money laundering enforcement standard, which requires violations be "significant or systemic" before the Fed can act. Barr stated this threshold "may limit the Board's ability to effectively ensure institutions maintain compliant anti-money laundering programs."
The Federal Reserve's September 24 proposal completes the regulatory scaffolding for a $303 billion stablecoin market that has operated for a decade with no federal prudential framework. The architecture is now visible: tiered capital charges that reward scale, Treasury-only reserves that eliminate credit risk from the reserve stack, two-day redemption windows that constrain maturity transformation, and a yield prohibition that separates stablecoins from interest-bearing instruments.
The 113-day gap between the comment deadline and the January 2027 enforcement date leaves limited room for iteration. Issuers that cannot meet the January deadline face a choice between seeking compliance through one of three federal pathways, restructuring offshore, or relying on the three-year exchange transition provision.
The proposal's most consequential feature may not be what it requires, but what it implies. By building capital tiers that compress at scale, the Fed has constructed a framework where the cost of compliance decreases as an issuer grows. In a market where two entities already control 85% of supply, the regulatory architecture reinforces the existing concentration rather than diffusing it.