FDIC Unveils Stablecoin Rules Under GENIUS Act, Excludes Deposit Insurance

• The FDIC has proposed rules for FDIC-supervised payment stablecoin issuers and banks involved in stablecoin activities under the GENIUS Act.
• The proposal makes clear that stablecoins themselves would not receive deposit insurance, and reserve deposits would not be insured to token holders on a pass-through basis.

The Federal Deposit Insurance Corporation has put forward a new stablecoin rulebook, giving the market a clearer sense of how US banking regulators intend to draw the line between regulated payment tokens and traditional insured deposits.

The proposal, approved by the FDIC board on Monday, would implement parts of the GENIUS Act for FDIC-supervised permitted payment stablecoin issuers and insured depository institutions engaging in stablecoin-related activity. The agency said the framework would cover areas including reserve assets, redemptions, capital and risk management standards.

Stablecoins stay outside the deposit insurance perimeter

The sharpest line in the proposal is probably the one around insurance. The FDIC said deposits held as reserves backing a payment stablecoin would not be insured to stablecoin holders on a pass-through basis. It also reiterated a broader principle already embedded in the GENIUS Act, namely that payment stablecoins are not insured deposits and cannot be marketed as if they carry the same federal protection as a bank account.

That distinction matters because it addresses one of the more persistent points of confusion in the stablecoin debate. Even where reserves sit inside the banking system, the token itself is not being treated as an insured banking product.

Regulators are also drawing a line around tokenized deposits

The FDIC proposal does something else worth noting. It says the definition of a deposit under the Federal Deposit Insurance Act is technology neutral, meaning tokenized deposits are not treated as a separate legal category just because they use blockchain rails.

In practice, the agency is trying to separate two things that are often blurred together in crypto markets: stablecoins issued under a dedicated payment-token framework, and tokenized forms of ordinary bank deposits. That may end up being one of the more consequential distinctions in the next phase of US digital asset regulation.