U.S. banks are counting down to stablecoin issuance! FDIC releases implementation plan for the "GENIUS Act"

The Federal Deposit Insurance Corporation (FDIC) in the United States has released a 38-page document detailing how American banks can apply to issue payment stablecoins, which is a key step in implementing the “GENIUS Act.” Under this framework, U.S. banks can apply through subsidiaries to issue stablecoins, with the FDIC evaluating standards such as financial condition, management quality, and redemption policies. The global stablecoin market has surpassed $300 billion, and U.S. banks will compete with Circle, Tether, and others.

From Legislation to Implementation: Milestones in U.S. Bank Stablecoin Regulation

(Source: FDIC)

The “GENIUS Act” (full name: “Guidance and Establishment of a U.S. Stablecoin Innovation Act”) was passed by the Senate in June and signed into law by President Trump in July. The act establishes a comprehensive regulatory framework for payment stablecoins, including requirements for issuers to maintain reserves on a one-to-one basis with the U.S. dollar or other approved high-quality liquid assets. From legislation to the FDIC proposing an implementation framework, U.S. stablecoin regulation is moving from paper to reality.

This 38-page document published on the FDIC website details the proposed approval requirements for FDIC-regulated subsidiaries issuing payment stablecoins. According to Bloomberg, before entering the next stage of rulemaking, the proposal will undergo a public consultation period. This means that while U.S. banks cannot immediately issue stablecoins, the application pathway is clear, and actual issuance could be just months away.

The rollout of this regulatory framework is strategically significant for U.S. banks. For a long time, traditional financial institutions could only watch as Circle’s USDC and Tether’s USDT dominated the stablecoin market, unable to participate directly. Now, the FDIC’s framework opens the door for compliant entry by U.S. banks, which could fundamentally change the competitive landscape of the stablecoin market.

The FDIC is responsible for insuring bank deposits and regulating member institutions. In recent years, the FDIC has taken a more active role in shaping how U.S. banks participate in digital asset transactions, including reconsidering the use of reputation risk in banking regulation. This shift has affected how financial institutions interact with crypto-related businesses, and the launch of the stablecoin framework is the latest manifestation of this change.

Three Major Approval Thresholds for U.S. Bank Stablecoin Issuance

According to the FDIC proposal, U.S. banks can apply through their subsidiaries to issue payment stablecoins, with the FDIC evaluating the subsidiary and its parent company based on standards set forth in the “GENIUS Act.” These standards form the three key thresholds that U.S. banks must cross to enter the stablecoin market.

Detailed Approval Standards

Financial Strength Certification: U.S. banks must demonstrate that their parent and subsidiary are financially sound, with sufficient capital to support stablecoin issuance and redemption.

Management Capability Assessment: The FDIC will review whether the U.S. bank’s management team possesses the expertise and risk management capabilities necessary to operate stablecoin business.

Technology and Compliance Systems: The bank must prove it has the technical infrastructure and redemption policies meeting stablecoin issuance standards, ensuring users can always exchange stablecoins for dollars.

Once approved, the FDIC will serve as the primary federal regulator overseeing the subsidiary’s payment stablecoin activities. This means that stablecoins issued by U.S. banks will enjoy higher regulatory transparency and trust compared to existing issuers. For institutional investors and corporate clients, stablecoins issued by FDIC-regulated U.S. banks may be more attractive than products issued by private companies.

This regulatory structure also provides U.S. banks with a competitive advantage. Currently, while Circle and Tether are large, they are not FDIC-regulated banking entities. Once U.S. banks begin issuing stablecoins, they can leverage their existing customer base, brand trust, and regulatory advantages to quickly capture market share. Imagine if JPMorgan Chase or Bank of America launched their own stablecoin—how many corporate clients would choose products backed by traditional financial giants?

U.S. Banks’ Opportunity in the $300 Billion Market

The total value of stablecoins in circulation worldwide has risen above $300 billion, almost entirely driven by dollar-pegged tokens. This enormous market size offers unprecedented business opportunities for U.S. banks and further cements the dollar’s dominance in the digital economy.

The “GENIUS Act” has been widely welcomed by the crypto industry, with executives from major companies such as Coinbase, Circle, Robinhood, and Gemini attending the signing ceremony by President Trump. This cross-industry support indicates that both traditional finance and crypto-native companies recognize the strategic value of a regulated stablecoin market for the U.S. economy.

Some industry insiders see this legislation as a tool to strengthen dollar liquidity and expand the dollar’s global influence through stablecoins. U.S. Treasury Secretary Steven Mnuchin has expressed similar views. When U.S. banks start issuing stablecoins, these tokens will become new digital carriers of the dollar, enabling users worldwide to hold and use dollars more conveniently, even in regions where traditional banking is hard to access.

For U.S. banks, stablecoin business is not only a new revenue stream but also a defensive strategy. If traditional U.S. banks do not enter this market, customers may turn to crypto-native stablecoin issuers, leading to deposit outflows. Conversely, actively issuing stablecoins allows U.S. banks to keep digital asset demand within their ecosystems, while earning transaction fees, interest income, and fostering deeper customer relationships.

However, entering the stablecoin market also presents challenges for U.S. banks. Building the necessary technical infrastructure, recruiting blockchain expertise, and integrating with existing crypto ecosystems require time and investment. Additionally, they must balance compliance with innovation, satisfying strict FDIC regulations while maintaining product competitiveness.