The Federal Reserve put two stablecoin rulemakings on the record on September 29 and left them open for public comment until November 30, 2026. The proposals decide how much cash and short-dated Treasury debt must sit behind every dollar token, how quickly an issuer has to hand your money back, and whether the company that mints the token is allowed to pay you anything for holding it.

Almost nobody who holds USDC, USDT or a smaller token will file a comment letter. The details still reach them, because the rules decide what the “1:1” on a stablecoin label is actually worth when the issuer is supervised by the Fed rather than by a state.

Two notices, a November 30 deadline

The Board approved both proposals on September 24 and published them in the Federal Register five days later. The first, Implementing the Federal Reserve Board’s Responsibilities Under the GENIUS Act, runs 104 pages at 91 FR 61580 under Docket No. R-1899. It covers reserve backing, capital, risk management, custody of reserve assets, and the ban on paying yield.

The second notice sets the application process for an insured state member bank that wants a subsidiary to issue payment stablecoins. It is shorter, at 91 FR 61346 under Docket No. R-1900, and it adds appeals, hearings and final determination procedures.

Both files are open for 60 days, closing on November 30. The Board’s announcement describes them as the next step in carrying out a law that Congress passed in July 2025.

The Fed is not first. The OCC, the FDIC, the Treasury and the NCUA have already proposed their own pieces of the framework. The Fed’s version matters most to consumers because it is the one that reaches issuers at scale, including any uninsured state-chartered issuer that grows past $10 billion in outstanding tokens. Section 4(d)(1)(A) of the law sends those larger issuers to a federal regulator, while smaller ones stay with state supervisors.

What the Board wants issuers to hold

Reserves would have to cover outstanding tokens at least one for one at all times, drawn from eight permitted categories. The list is narrow. It includes U.S. coins and currency, balances held at a Federal Reserve Bank, demand deposits at insured banks, Treasury bills with 93 days or less left to maturity, overnight repurchase agreements backed by those securities, and government money market funds that hold nothing else.

The 93-day cap is the part worth remembering. A token issuer cannot reach for longer-dated Treasuries, mortgage bonds or corporate paper to chase a better return on the money behind your token. Section 4(a)(1)(A) of the law fixes that maturity limit, and the proposal keeps it.

Around the reserve rule sits a second layer: capital for credit and operational losses, a written risk management program, an information security program, and limits on dealings with insiders and affiliates. The proposal also reaches the firms that stand between an issuer and the assets, setting standards for anyone safekeeping reserve assets or the private keys that control them.

One disclosure obligation continues on its own schedule. Issuers would still have to publish the composition of their reserves on their own website by noon on the last day of each month, covering the previous month. That report is the main public check on whether the backing is real.

Item What the proposal sets
Reserve backing At least 1:1 at all times, eight permitted asset types
Treasury maturity 93 days or less
Redemption deadline No later than two business days after the request
Reserve report Published monthly, by noon on the last day of the month
Comment deadline November 30, 2026

Cashing out within two business days

Proposed section 247.12(b)(2) would bar a Fed-supervised issuer from taking longer than two business days to redeem a token after a holder asks. The Board calls that an outer limit, not a target, so an issuer is free to be faster. It also asks whether the standard should be tighter for small amounts.

The FDIC landed on the same two-business-day benchmark in its own April 2026 proposal, so the two agencies are pointing in the same direction on the question holders care about most: how long a queue stands between a token and a bank balance.

Two business days is not the same as instant. A request made on a Friday afternoon, or during a bank holiday, is unlikely to clear the same day. Stablecoins trade around the clock, and that has trained users to expect settlement around the clock too. Redemption through a regulated issuer is a banking process, and the proposal treats it as one.

The Board is still asking what should happen when an issuer falls short of the minimum reserve requirement. One option in the notice would force it to start liquidating assets and redeeming tokens after 15 consecutive business days below the line.

Yield payments and the third-party loophole

The clearest consumer-facing restriction is the ban on paying yield. Under section 4(a)(11) of the law, an issuer cannot pay interest or yield to a holder in cash, tokens or any other form of consideration, when the payment is tied solely to holding, using or retaining the stablecoin.

The Fed’s proposal spends pages on the obvious workaround. Issuers could try to pay through an affiliate, a partner platform or a related third party and argue that the payment came from someone else. The proposal treats an arrangement of that kind as the issuer paying yield itself in a range of cases, and it asks the industry where that line should sit.

That matters to anyone collecting a yield on a stablecoin balance. In practice those payments usually come from an exchange, a broker or a lending desk, not from the issuer’s own income. The proposal does not ban a card-style reward program outright, and it does not claim to capture every arrangement. It does say the Fed cannot list them all in advance, which is why the comment file on this point will be the one to read.

The same notice applies the tying prohibition to every payment stablecoin issuer, whatever charter it holds, and puts that authority with the Board. In plain terms, an issuer will not be able to dodge the yield ban by choosing a different regulator.

Where the safety net stops short

A stablecoin is not a deposit. The FDIC said as much in its April 2026 proposal, which concluded that reserve deposits backing a token would not be insured to token holders on a pass-through basis. The bank holding the reserves keeps its own coverage, capped at $250,000 for that account, but the coverage does not continue down to the people holding the tokens.

So the federal deposit insurance limit that protects a savings account does not follow a stablecoin balance. A holder’s claim runs against the issuer, backed by the reserve pool and whatever capital the issuer is required to hold. That is a different promise from the one a bank makes, even when both are described as a dollar.

For most people, a second layer sits in front of the issuer. Tokens bought on an exchange are held through that platform’s systems until they are withdrawn, and a platform failure or a hot-wallet breach can interrupt access long before an issuer’s reserves come into question. That risk sits with the platform, not with the token’s backing, and it is worth understanding before parking a large cash balance in a stablecoin. Our guide to exchange safety and custody walks through how that exposure works in practice.

Banks that want in: the paperwork

The second notice answers a question the banking side has been asking since 2025: how does a bank get permission to issue a token through a subsidiary? An insured state member bank would file a business plan, financial projections, its proposed capital structure, background information on the people involved, and a description of how it will meet the law’s compliance duties.

The proposal also builds out the procedural side that rarely makes headlines but decides how quickly approvals move: how the Board gives notice, when it holds a hearing, how a bank appeals an adverse decision, and when a determination becomes final. Banks weighing a stablecoin business now have a defined path, with a defined answer for what happens when the answer is no.

Points the Board left open

The notice is candid about what it has not decided. The Fed asks whether Treasury notes, floating rate notes and inflation-protected securities should count as reserves if they meet the maturity test, and whether it should add a weighted average maturity limit on top of the 93-day cap.

It also asks how to treat tokenized versions of reserve assets, where the token has to carry the same legal rights as the asset it represents. And it asks where to set the thresholds that trigger corrective action after a reserve shortfall.

Those questions are the gap between a proposal and a final rule. Answers will depend on how many substantive comments land before November 30, and on how the other banking agencies line up their own versions.

From proposal to final rule

Nothing here binds an issuer yet. A proposal becomes a rule only after the comment period closes and the Board adopts a final version, which then carries a compliance date.

The statute sets the outer boundary. Section 20 of the GENIUS Act takes effect on the earlier of two dates: 18 months after enactment, which falls on January 18, 2027, or 120 days after the primary federal regulator issues final rules. Because that test picks the earlier date, the framework can start sooner than January 2027, but the provisions that need rules on the books cannot drift past it without leaving issuers in a gap.

For anyone holding stablecoins, three things are worth tracking over the next quarter: whether the yield language survives comment intact, how fast the Board moves from proposal to final rule, and whether the monthly reserve reports published by issuers match the narrow asset list the Fed wants to lock in.

The regulatory picture for digital assets more broadly is moving at the same time. The SEC’s separate proposal on crypto asset regulation covers a different part of the market, and the two tracks will shape what an American investor can buy, hold and earn. Rate policy feeds into it as well, since higher short-term yields raise the return on the Treasury bills that back these tokens, which is one reason the yield ban is contested. Our explainer on how Fed rate decisions work covers the mechanics behind that link.

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