[Federal Register Volume 90, Number 242 (Friday, December 19, 2025)]
[Proposed Rules]
[Pages 59409-59418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-23510]
[[Page 59409]]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 303
RIN 3064-AG20
Approval Requirements for Issuance of Payment Stablecoins by
Subsidiaries of FDIC-Supervised Insured Depository Institutions
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is soliciting
comments on a proposal that would establish procedures to be followed
by an insured State nonmember bank or State savings association (each,
an FDIC-supervised institution) that seeks to obtain FDIC approval to
issue payment stablecoins through a subsidiary pursuant to the Guiding
and Establishing National Innovation for U.S. Stablecoins Act (GENIUS
Act).
DATES: Comments must be received by the FDIC no later than February 17,
2026.
ADDRESSES: You may submit comments, identified by RIN 3064-AG20, by any
of the following methods:
FDIC Website: https://www.fdic.gov/federal-register-publications. Follow instructions for submitting comments on the agency
website.
Email: [email protected]. Include RIN 3064-AG20 in the
subject line of the message.
Mail: Jennifer M. Jones, Deputy Executive Secretary,
Attention: Comments--RIN 3064-AG20, Federal Deposit Insurance
Corporation, 550 17th Street NW, Washington, DC 20429.
Hand Delivery to FDIC: Comments may be hand-delivered to
the guard station at the rear of the 550 17th Street NW building
(located on F Street) on business days between 7 a.m. and 5 p.m.
Public Inspection: Comments received, including any
personal information provided, may be posted without change to https://www.fdic.gov/federal-register-publications. Commenters should submit
only information that the commenter wishes to make available publicly.
The FDIC may review, redact, or refrain from posting all or any portion
of any comment that it may deem to be inappropriate for publication,
such as irrelevant or obscene material. The FDIC may post only a single
representative example of identical or substantially identical
comments, and in such cases will generally identify the number of
identical or substantially identical comments represented by the posted
example. All comments that have been redacted, as well as those that
have not been posted, that contain comments on the merits of the
proposed rule will be retained in the public comment file and will be
considered as required under all applicable laws. All comments may be
accessible under the Freedom of Information Act.
This proposal, all comments received, and a summary of not more
than 100 words of the proposed rule pursuant to the Providing
Accountability Through Transparency Act of 2023 are available at
https://www.fdic.gov/federal-register-publications.
FOR FURTHER INFORMATION CONTACT: Alfred L. Seivold, Acting Senior
Deputy Director, (415) 808-8248, [email protected], Division of Complex
Institution Supervision and Resolution; Sandra Macias, Acting Associate
Director, (202) 898-3642, [email protected], Division of Risk Management
Supervision; Nicholas Simons, Counsel, (202) 898-6785,
[email protected]; Chantal Hernandez, Counsel, (202) 898-7388,
[email protected]; Eugene Frenkel, Fin-Tech Counsel, (202) 898-3578,
[email protected], Legal Division.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The FDIC is issuing this notice of proposed rulemaking (proposed
rule) to implement certain application provisions under the GENIUS Act
(or the Act).\1\ The proposed rule would establish a tailored
application process for an FDIC-supervised institution to obtain
approval from the FDIC to issue payment stablecoins \2\ through a
subsidiary. The FDIC seeks to evaluate the safety and soundness of an
applicant's proposed activities based on consideration of statutory
factors and support the responsible growth and use of digital assets
and related technologies \3\ while minimizing the regulatory burden on
applicants.
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\1\ Public Law 119-27, 139 Stat. 419 (codified at 12 U.S.C.
5901-5916).
\2\ See 12 U.S.C. 5902. The GENIUS Act defines a payment
stablecoin as a digital asset 1) that is, or is designed to be, used
as a means of payment or settlement and 2) the issuer of which is
obligated to convert, redeem, or repurchase for a fixed amount of
monetary value and represents or creates the reasonable expectation
that it will maintain a stable value relative to a fixed amount of
monetary value. 12 U.S.C. 5901(22)(A). The GENIUS Act further
provides that a payment stablecoin is not a national currency,
deposit, or security. 12 U.S.C. 5901(22)(B). Stablecoins that are
used or designed for other purposes, such as non-payment
stablecoins, are outside the scope of this proposed rule.
\3\ See Executive Order 14178, Strengthening American Leadership
in Digital Financial Technology, 90 FR 8647 (Jan. 31, 2025).
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II. Background and Authority
A. GENIUS Act Overview
The GENIUS Act was enacted on July 18, 2025, and will become
effective on January 18, 2027, or 120 days after the date on which the
primary Federal payment stablecoin regulators \4\ issue any final
implementing regulations, if earlier.\5\ This proposed rule, once
finalized, will implement the Federal statutory framework for
applications for issuance of payment stablecoins and related payment
stablecoin activities by subsidiaries of FDIC-supervised institutions
for which the FDIC is the primary Federal payment stablecoin regulator,
as defined under section 2 of the Act.\6\ A subsidiary of an insured
depository institution (IDI) \7\ that has been approved to issue
payment stablecoins under section 5 of the GENIUS Act is a permitted
payment stablecoin issuer, or PPSI.
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\4\ The primary Federal payment stablecoin regulators are the
FDIC, the Office of the Comptroller of the Currency (OCC), the Board
of Governors of the Federal Reserve System (FRB), and the National
Credit Union Administration (NCUA). See 12 U.S.C. 5901(25).
\5\ Section 20 of the GENIUS Act, governing the effective date,
is codified in the note to 12 U.S.C. 5901.
\6\ 12 U.S.C. 5901(25).
\7\ ``Insured depository institution'' is defined in section
2(15) of the GENIUS Act, 12 U.S.C. 5901(15). The GENIUS Act uses the
term ``insured depository institution'' to refer to both an insured
depository institution, as defined in section 3 of the Federal
Deposit Insurance Act (FDI Act) (12 U.S.C. 1813) and an insured
credit union, as defined in section 101 of the Federal Credit Union
Act (12 U.S.C. 1752).
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Under the GENIUS Act, subject to certain limited exceptions, only a
PPSI may issue a payment stablecoin in the United States. A PPSI is a
person \8\ formed in the United States that is (1) a subsidiary of an
IDI approved by its primary Federal payment stablecoin regulator; (2) a
Federal qualified payment stablecoin issuer approved by the OCC; or (3)
a State-qualified payment stablecoin issuer approved by its State
payment stablecoin regulator.\9\ With respect to a PPSI that is a
subsidiary of an IDI, the PPSI's primary Federal payment stablecoin
regulator is the same as the IDI's appropriate Federal banking agency
under section 3 of the Federal Deposit Insurance (FDI)
[[Page 59410]]
Act or the National Credit Union Administration, as applicable.\10\
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\8\ The GENIUS Act defines a ``person'' as an individual,
partnership, company, corporation, association, trust, estate,
cooperative organization, or other business entity, incorporated or
unincorporated. 12 U.S.C. 5091(24).
\9\ See 12 U.S.C. 5901(23).
\10\ See 12 U.S.C. 5901(1), (23), (25)(A); 12 U.S.C. 5904.
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The FDIC is the appropriate Federal banking agency of each IDI that
is a State-chartered insured bank that is not a member of the Federal
Reserve System (State non-member bank) \11\ and each State-chartered
savings association (State savings association) (collectively, as noted
above, FDIC-supervised institutions).\12\ Accordingly, an FDIC-
supervised institution must obtain approval for its subsidiary PPSI
from the FDIC pursuant to the GENIUS Act and, once the application is
approved, the FDIC will supervise that PPSI as its primary Federal
payment stablecoin regulator.
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\11\ The term ``State nonmember bank'' includes any insured
State bank that is an industrial bank, industrial loan company, or
other similar institution that is excluded from the definition of
``bank'' in section 2(c)(2)(H) of the Bank Holding Company Act (12
U.S.C. 1841(c)(2)(H)). See FDI Act section 3(a)(2) (12 U.S.C.
1813(a)(2)); 12 CFR part 347.
\12\ See 12 U.S.C. 1813(q). As of September 30, 2025, the FDIC
supervises approximately 2,772 insured State nonmember banks and
insured State savings associations. FDIC Call Report Data, September
30, 2025. The FDIC is also the appropriate Federal banking agency of
any foreign bank having an insured State branch.
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B. Statutory Requirements and Authority for Approving PPSI Applications
1. Authority To Accept and Process PPSI Applications
Section 5 of the GENIUS Act directs the FDIC, and the other primary
Federal payment stablecoin regulators, to establish a process and
Federal framework for the licensing, regulation, examination, and
supervision of PPSIs that prioritizes the safety and soundness of such
entities.\13\ As required by the GENIUS Act, this proposed rule would
establish a process and Federal framework for the acceptance and
processing of PPSI applications \14\ from FDIC-supervised institutions
that is consistent with the requirements of the Act.\15\
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\13\ See 12 U.S.C. 5904(a)(1)(B).
\14\ See 12 U.S.C. 5904(a)(2).
\15\ See 12 U.S.C. 5904(g).
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2. Overview of the Application Process
In connection with the processing of applications to issue payment
stablecoins, section 5 of the GENIUS Act includes specific timelines,
evaluation criteria, and appeal rights for denied applicants.
The FDIC is required to evaluate and make a determination on a
substantially complete application \16\ using the factors listed in
section 5(c) of the GENIUS Act, including the subsidiary's ability to
meet statutory and regulatory requirements and other factors related to
management and safety and soundness.\17\ These factors are discussed in
greater detail in section II.B.3 of this document. The GENIUS Act
provides that the FDIC shall only deny an application upon determining
that the activities of the applicant (including the proposed activities
of the subsidiary) would be unsafe or unsound based on the factors.\18\
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\16\ The GENIUS Act provides that an application is
substantially complete if it contains sufficient information for the
FDIC to render a decision on whether the applicant satisfies
specified statutory factors. See 12 U.S.C. 5904(d)(1)(B)(i). For
applications pending as of the effective date of the GENIUS Act,
section 5(f) of the Act authorizes the FDIC to provide a safe harbor
for an FDIC-supervised institution's subsidiary and waive
requirements under the GENIUS Act for up to 12 months from the Act's
effective date. 12 U.S.C. 5904(f).
\17\ See 12 U.S.C. 5904(c).
\18\ 12 U.S.C. 5904(d)(2)(A)(i). The GENIUS Act provides that
the issuance of a payment stablecoin on an open, public, or
decentralized network is not a valid basis for denying an
application. 12 U.S.C. 5904(d)(2)(A)(ii).
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If the FDIC denies an application, it must provide the applicant
with an opportunity to appeal. The GENIUS Act sets forth specific
timelines for requesting an appeal, holding a hearing, and issuing a
final decision, but is silent on the modus for appeal.\19\ Lastly, the
GENIUS Act states that a denial does not prohibit an applicant from
filing a subsequent application.\20\
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\19\ 12 U.S.C. 5904(d)(2)(C).
\20\ 12 U.S.C. 5904(d)(4).
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3. Required Factors for the Evaluation of Applications
a. Ability To Meet Requirements for Issuing Payment Stablecoins Under
Section 4 of the GENIUS Act
When evaluating an application, section 5(c)(1) of the GENIUS Act
provides that the FDIC is required to consider the ability of the IDI's
subsidiary, based on financial condition and resources, to meet the
requirements for issuing payment stablecoins set forth in section 4 of
the GENIUS Act.\21\ Section 4 sets out standards for the issuance of
payment stablecoins by PPSIs.\22\ Section 4 requires that a PPSI
maintain identifiable reserves backing the outstanding payment
stablecoins on at least a 1 to 1 basis, comprised of specified
categories of reserves,\23\ and the ability to relatedly meet the
monthly reserve disclosure requirements applicable to a PPSI. The
reserve disclosure requirements include disclosing the composition of
the PPSI's reserves on its website \24\ and submitting to the FDIC
certified reports examined by a public accounting firm regarding the
prior month's reserve composition disclosure.\25\
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\21\ 12 U.S.C. 5903.
\22\ 12 U.S.C. 5903(a).
\23\ 12 U.S.C. 5903(a)(1)(A).
\24\ 12 U.S.C. 5903(a)(1)(C).
\25\ 12 U.S.C. 5903(a)(3)(A).
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Additionally, the FDIC is required to consider the ability of the
IDI's subsidiary, based on financial condition and resources, to comply
with forthcoming regulations to be issued by the FDIC regarding capital
requirements; liquidity requirements; reserve asset diversification;
and operational, compliance, and information technology risk management
principles-based requirements and standards, including Bank Secrecy Act
(BSA) and sanctions compliance standards.\26\
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\26\ 12 U.S.C. 5903(a)(4)(A). The FDIC is currently developing
proposed regulations that will be issued for public comment. Section
4(a)(5) of the GENIUS Act treats a PPSI as a financial institution
for purposes of the BSA and subjects the PPSI to all applicable
Federal laws relating to economic sanctions, prevention of money
laundering, customer identification, and due diligence. See 12
U.S.C. 5903(a)(5)(A). The FDIC will consider any BSA and sanctions
regulations that may be issued by the U.S. Department of the
Treasury.
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Section 4 also establishes certain limitations on a PPSI's
activities and generally only permits PPSIs to issue and redeem payment
stablecoins, manage related reserves, provide certain payment
stablecoin and reserve custodial and safekeeping services,\27\
undertake other activities that directly support those activities,\28\
and engage in digital asset service provider activities.\29\ In
addition, section 4 establishes, subject to limited exceptions, a
prohibition on pledging, rehypothecating, or reusing a PPSI's reserves
assets.\30\
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\27\ If federally supervised, an approved PPSI can engage in
custody and safekeeping services for payment stablecoin reserves,
payment stablecoins used as collateral, and private keys used to
issue permitted payment stablecoins. See 12 U.S.C. 5909(a).
\28\ 12 U.S.C. 5903(a)(7)(A). In addition to payment stablecoin
activities of the PPSI, the FDIC-supervised institution may engage
in certain payment stablecoin activities pursuant to section 16(b)
of the GENIUS Act. See 12 U.S.C. 5915(b). Issuance, however, is
limited to the PPSI, which is the FDIC-supervised institution's
subsidiary.
\29\ See 12 U.S.C. 5903(a)(7)(B); 12 U.S.C. 5901(7) (defining
digital asset service provider).
\30\ 12 U.S.C. 5903(a)(2).
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b. Factors Related to Management
The FDIC is also required to consider factors related to management
described in sections 5(c)(2) and 5(c)(3) of the GENIUS Act. Section
5(c)(2) requires the FDIC to consider whether an individual that has
been convicted of a felony
[[Page 59411]]
offense involving insider trading, embezzlement, cybercrime, money
laundering, financing of terrorism, or financial fraud is serving as an
officer or director of the applicant.\31\ Section 5(c)(3) requires the
FDIC to consider the competence, experience, and integrity of the
officers, directors, and principal shareholders of the applicant, its
subsidiaries, and parent company, including the record of compliance
with laws and regulations and ability to fulfill any commitments and
conditions of the FDIC in connection with the application and prior
applications.\32\
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\31\ 12 U.S.C. 5904(c)(2).
\32\ 12 U.S.C. 5904(c)(3).
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c. Redemption Policy
Under section 5(c)(4) of the GENIUS Act, the FDIC is required to
consider whether the applicant's redemption policy can meet the
standards specified under section 4(a)(1)(B).\33\ This includes whether
the applicant has established clear and conspicuous procedures for
timely redemption of outstanding payment stablecoins; \34\ whether the
PPSI will publicly, clearly, and conspicuously disclose, in plain
language, all fees associated with purchasing or redeeming its payment
stablecoins; \35\ and whether the PPSI will meet the prohibition on
changing such fees without at least 7 days' prior notice to
consumers.\36\
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\33\ 12 U.S.C. 5904(c)(4).
\34\ 12 U.S.C. 5903(a)(1)(B)(i).
\35\ 12 U.S.C. 5903(a)(1)(B)(ii).
\36\ 12 U.S.C. 5903(a)(1)(B)(ii).
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d. Other Factors
Lastly, section 5(c)(5) of the GENIUS Act allows the FDIC to
establish and consider any other factors as necessary to ensure the
safety and soundness of the PPSI when evaluating an application.\37\
The FDIC is not proposing to establish any additional factors pursuant
to section 5(c)(5) of the GENIUS Act at this time.
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\37\ 12 U.S.C. 5904(c)(5).
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III. Description of the Proposed Rule
A. Overview of the Proposed Application Procedures
To implement the statutory requirements described above, the
proposed rule would add a new Sec. 303.252 to title 12, part 303,
subpart M of the FDIC Rules and Regulations, titled ``Permitted payment
stablecoin issuers.'' This new section would apply to FDIC-supervised
institutions that seek to issue payment stablecoins through a
subsidiary. The proposed rule, as described below, addresses scope;
definitions; filing location; contents of the filing; additional
information for applications; processing decisions; and hearing and
appeal procedures and final determination. The proposed rule would
implement the requirements of section 5 of the GENIUS Act with respect
to evaluating the factors, processing applications within specified
timeframes, and establishing an appeal process. As required under the
GENIUS Act, the FDIC would only deny an application if the activities
of the applicant would be unsafe or unsound based on the factors
described in section 5(c) of the Act.
B. Description of Proposed Application Procedures
1. Scope
Paragraph (a) of proposed Sec. 303.252 would establish the scope
of the proposed section. It would state that proposed Sec. 303.252
sets forth the application requirements and procedures for an FDIC-
supervised institution to submit an application to issue payment
stablecoins through a subsidiary that would become a PPSI under the
GENIUS Act.
2. Definitions
Paragraph (b) would define relevant terms for purposes of proposed
Sec. 303.252. The term ``applicant'' would mean an FDIC-insured State
nonmember bank or an FDIC-insured State savings association that seeks
to issue payment stablecoins through a subsidiary. This definition
would distinguish the applicant--the FDIC-supervised institution--from
the PPSI subsidiary through which the institution would issue payment
stablecoins and perform certain other payment stablecoin activities
permitted by the GENIUS Act. ``Digital asset service provider,''
``payment stablecoin,'' and ``permitted payment stablecoin issuer''
would be defined by referencing the relevant definitions in section 2
of the GENIUS Act. The terms ``State nonmember bank,'' ``State savings
association,'' and ``subsidiary'' would have the meanings given those
terms in section 3 of the FDI Act.\38\ Finally, the term
``substantially complete'' would be defined in a manner consistent with
the standard set forth in section 5(d)(1)(B)(i) of the GENIUS Act.
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\38\ Section 3(w)(4) of the FDI Act (12 U.S.C. 1813(w)(4))
states that the term ``subsidiary'' (1) means any company which is
owned or controlled directly or indirectly by another company; and
(2) includes any service corporation owned in whole or in part by an
insured depository institution or any subsidiary of such a service
corporation.
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3. Filing Location
Paragraph (c) of proposed Sec. 303.252 would state that
applications under the new section shall be filed with the appropriate
FDIC region, as defined in 12 CFR 303.2(g), which is consistent with
the FDIC's practice for receiving other types of applications.
4. Contents of Filing
Paragraph (d) of proposed Sec. 303.252 would describe the contents
of the filing. Under the proposed rule, the applicant would submit
information to the FDIC in the form of a letter application that would
contain the information listed in the regulation, to the extent
applicable. Paragraph (d) would minimize the regulatory burden for
applicants by requesting only information necessary to evaluate the
factors to be considered under section 5(c) of the GENIUS Act and to
determine the safety and soundness of the proposed activities of the
applicant, inclusive of the activities of its subsidiary. Whenever
possible, the FDIC would utilize information already available to it as
the primary Federal regulator of the applicant, such as supervisory and
examination information, rather than requiring duplicative information
to be submitted as part of an application. Given that the applicant
would be an FDIC-supervised institution, known to the appropriate
region, the FDIC, at this time, has not proposed to establish any
additional factors pursuant to section 5(c)(5) of the GENIUS Act. The
applicant may, however, include any other materials or information that
it would like the FDIC to consider.
Proposed paragraph (d)(1) would require a description of the
proposed payment stablecoin and the proposed activities of the
subsidiary of the applicant, including related activities of the
applicant, how the subsidiary plans to maintain the proposed payment
stablecoin's stable value, or the reasonable expectation thereof, and
any proposed incidental activities to the payment stablecoin activities
or digital asset service provider activities. The FDIC would expect
that the applicant's materials provide a description of the
characteristics and features of the proposed payment stablecoin as well
as the identities, roles, and responsibilities of the entities involved
in the proposed payment stablecoin activities. The FDIC would expect
applicants to describe what activities would be performed at the
applicant and subsidiary levels regarding the proposed payment
stablecoin, as well as whether any third parties would participate in
the
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proposed payment stablecoin activity. In addition, when describing how
the subsidiary plans to maintain the proposed payment stablecoin's
stable value, or the reasonable expectation thereof, the FDIC would
expect the application to include whether there are any planned
applicant-provided sources of strength, applicant guarantees, and/or
intercompany agreements. Finally, the FDIC would expect a description
of any proposed incidental activities of the applicant or the
subsidiary to payment stablecoin activities or digital asset service
provider activities, and those that directly support activities that a
PPSI may undertake in accordance with section 4(a)(7)(A) of the GENIUS
Act. The FDIC is proposing to include this information in the contents
of the filing because understanding the proposed payment stablecoin and
proposed activities of the subsidiary, including related activities of
the applicant, the mechanism to maintain the proposed payment
stablecoin's stable value or the reasonable expectation thereof, and
any proposed incidental activities and digital asset service provider
activities of the subsidiary are necessary to evaluate the ability of
the subsidiary in light of its financial condition and resources to
meet the requirements set forth under section 4 of the GENIUS Act.
Furthermore, information on the proposed payment stablecoin and related
activities would be necessary for the FDIC to determine whether the
activities of the applicant would be unsafe or unsound based on the
factors described in section 5(c), which is the sole basis for any
denial.\39\
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\39\ 12 U.S.C. 5904(d)(2).
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Proposed paragraph (d)(2) would request relevant financial
information for the subsidiary, including planned capital and liquidity
structure; reserve assets and composition and associated asset
management plan; and financial projections for the first three years of
operations. With respect to a planned capital and liquidity structure,
the FDIC may consider any planned financial commitments from the
applicant's or subsidiary's officers, directors, and principals or
shareholders, or if there is a plan to launch the payment stablecoin as
part of a consortium approach. The FDIC would expect that information
provided on reserve assets and composition and their associated asset
management plan to include a description of whether any reserves are
proposed to be in tokenized form. In addition, the FDIC would expect
that the asset management plan to contain details of how the applicant
or subsidiary would manage the reserves, including how reserve assets
are expected to change and what would prompt such a change in reserves.
The FDIC would further expect the relevant financial information,
including capital and liquidity, reserve assets and composition, and
the associated asset management plan, to demonstrate consistency with
forthcoming regulations that would implement the standards required by
section 4 of the GENIUS Act. Finally, the applicant would provide
financial projections for the first three years of the subsidiary's
operations. Such content would generally align with the FDIC's practice
of requesting three years of pro forma financial statements as a
component of other applications, such as with mergers and deposit
insurance applications for de novo institutions. The information in
this proposed paragraph would be relevant to the FDIC's consideration
of the factor in section 5(c)(1) of the GENIUS Act regarding the
ability of the subsidiary, based on financial condition and resources,
to meet the requirements set forth under section 4 of the Act.
Proposed paragraph (d)(3) would state that an application shall
contain a description of the subsidiary's ownership and control
structure; organizing documents; and a list of the subsidiary's
proposed directors, officers, and shareholders (if different from the
applicant), including a statement as to whether any of the proposed
directors and officers have been convicted of a felony offense
involving insider trading, embezzlement, cybercrime, money laundering,
financing of terrorism, or financial fraud. The FDIC could accept an
organizational chart that includes the requisite information to show
the subsidiary's ownership and control structure. The FDIC could accept
proposed or draft organizing documents initially, with final versions
to be provided when available, either prior to FDIC approval, or
subsequently as a condition of the FDIC's approval. If a proposed
payment stablecoin is to be backed or offered by multiple banks through
a consortium structured as a subsidiary of an FDIC-supervised
institution, the FDIC would expect the application to include the
governance structure of such arrangement, including expected activities
of the other members of the consortium. The FDIC would anticipate
accepting and processing a single application on behalf of all other
FDIC-supervised members of the consortium if the consortium could be
considered a subsidiary of each. The FDIC is proposing to include this
information in the contents of the filing because it is necessary to
resolve the factors set forth in sections 5(c)(2) and 5(c)(3) of the
GENIUS Act.
Proposed paragraph (d)(4) would require submission of relevant
policies and procedures and customer agreements, including for custody
and safekeeping; segregating customer and reserve assets;
recordkeeping; reconciliation and transaction processing; redemption;
and BSA/anti-money laundering (AML)/countering the financing of
terrorism (CFT) and economic sanctions requirements pursuant to section
4(a)(5) of the GENIUS Act. When including relevant policies and
procedures and customer agreements, the FDIC would expect the applicant
to include terms of use, privacy disclosures, any public disclosures
required under the GENIUS Act, and any disclosures required by other
applicable laws and regulations. Policies and procedures such as those
related to custody and safekeeping, segregating customer and reserve
assets, recordkeeping, reconciliation, and transaction processing would
be relevant for the FDIC to evaluate the financial condition and
resources affecting the ability of the subsidiary to meet the
requirements set forth under section 4 of the GENIUS Act, pursuant to
the factor set forth in section 5(c)(1) of the GENIUS Act. Such
information is relevant to the FDIC's evaluation, based on the
financial condition and resources of the subsidiary, of whether it
would be able to maintain the proposed payment stablecoin's stable
value or reasonable expectation thereof, the ability of the subsidiary
to meet customer redemption requests, and the accuracy of public
disclosures of reserve assets. The FDIC would review any recordkeeping,
reconciliation, and transaction processing policies and procedures,
including both on- and off-chain procedures. The FDIC would expect the
redemption policy, required by section 4(a)(1)(B) of the GENIUS Act, to
explain the responsibilities and obligations of the applicant and the
subsidiary, the process, conditions, and time period by which the
payment stablecoin may be redeemed, who may redeem the payment
stablecoin, and the circumstances under which the redemption of the
payment stablecoin may be limited, delayed, or suspended. Additionally,
the submission of BSA/AML/CFT and economic sanctions information would
be necessary to evaluate whether the subsidiary would be able to comply
with requirements under section 4 pursuant to the factor in section
5(c)(1) of the GENIUS Act. The submission of the policies, procedures,
[[Page 59413]]
and customer agreements enumerated in proposed paragraph (d)(4) is each
designed to allow the FDIC to evaluate the factors in section 5(c) of
the GENIUS Act and determine whether the activities of the applicant
would be unsafe or unsound.
Finally, proposed paragraph (d)(5) would require inclusion of an
engagement letter with a registered public accounting firm. This
information is intended to demonstrate that the applicant's subsidiary
would be able to comply with the examination of monthly reserve reports
and certification requirements in section 4 of the GENIUS Act, which is
necessary for the FDIC to evaluate the factors in section 5(c)(1) of
the GENIUS Act.
5. Additional Information
Paragraph (e) of proposed Sec. 303.252 would specify that the FDIC
may request additional information as it deems necessary solely for its
consideration of the factors listed in section 5(c) of the GENIUS Act.
As described above, to the extent possible, the FDIC would use
information available to it as the primary Federal regulator of the
applicant rather than requesting duplicative information.
6. Processing
Paragraph (f) of proposed Sec. 303.252 would describe application
processing, following the requirements and timelines established by the
GENIUS Act. Pursuant to section 5(d)(1)(B)(ii) of 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 under the proposed section. At that time, if
the application is not considered substantially complete--i.e., the
application does not contain 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--the FDIC shall specify the
additional information the applicant shall provide for the application
to be considered substantially complete. Examples of instances where
the FDIC might not consider an application to be substantially complete
include if it does not provide all of the items required by regulation,
if the information provided contains significant gaps or is unclear in
any material respect, or if the FDIC determines that there are issues
or deficiencies in the information provided that must be resolved or
supplied for the FDIC to be able to adequately consider the GENIUS Act
factors. This proposed paragraph would also state that, following
notification by the FDIC that the application is considered
substantially complete, the applicant shall notify the FDIC if there is
a material change in circumstances that would require the FDIC to treat
the pending application as a new application, pursuant to section
5(d)(1)(B)(iii) of the GENIUS Act. Such material changes may include a
change to the applicant's financial condition, the proposed activities
of the PPSI, or any other change that could implicate the safety or
soundness of the applicant. The proposed rule would provide that if the
FDIC fails to notify the applicant within 30 days after receiving an
application, the application shall be deemed substantially complete as
of the date it was received by the FDIC.
7. Decisions
The GENIUS Act establishes the Federal payment stablecoin
regulators' decision-making process regarding an application, such as
timing, considerations, and notices. Therefore, paragraph (g) of
proposed Sec. 303.252 would largely follow the language of the GENIUS
Act in describing the FDIC's decision-making process. It would state
that the FDIC shall approve or deny an application not later than 120
days after receiving a substantially complete application under
proposed Sec. 303.252. In accordance with section 5(d) of the GENIUS
Act, proposed paragraph (g)(1) would provide for deemed approval,
stating that if the FDIC does not render a decision on a substantially
complete application within 120 days of receiving a substantially
complete application, the application shall be deemed approved.
Proposed paragraph (g)(2), regarding approval with conditions, would
state that the FDIC may impose conditions upon approving an
application, including the standard conditions defined under 12 CFR
303.2(bb), and that such conditions shall not impose requirements in
addition to the requirements of section 4 of the GENIUS Act. The FDIC
generally intends for approval with conditions to include routine
items. This may include, for example, the submission of items that were
not included or finalized in the application, such as final organizing
documents, or fulfillment of commitments of the applicant such as
capital injections. Finally, proposed paragraph (g)(3) would describe
the FDIC's denial of an application. The proposed paragraph would
state, in accordance with the grounds for denial provided by section
5(d)(1) of the GENIUS Act, that the FDIC shall deny a substantially
complete application if the activities of the applicant would be unsafe
or unsound based on the factors to be considered. In accordance with
the response and timelines required by section 5(d)(2) of the GENIUS
Act, the proposed paragraph would also state that the FDIC shall
provide the applicant with written notice of the basis for denial not
later than 30 days after the date of such denial with an explanation
that shall include all findings made by the FDIC with respect to all
identified material shortcomings in the application, including
recommendations to address such shortcomings. As described above, the
FDIC's proposed paragraph (g) largely follows and reiterates the
provisions of the GENIUS Act regarding decisions on applications.
8. Appeal and Final Determination
Section 5(d)(2)(C) of the GENIUS Act provides for hearing and
appeal processes following denial of an application, which would be
implemented by proposed paragraph (h). In accordance with the GENIUS
Act, proposed paragraph (h)(1) would state that not later than 30 days
after the receipt of a denial of an application under the proposed
section, the applicant may request, in writing, a written or oral
hearing before the FDIC. Under the proposed rule, for purposes of an
appeal, the FDIC would treat a denial of a PPSI application as akin to
a material supervisory determination, requiring a denied applicant to
follow procedures similar to the process for an appeal of a material
supervisory determination but within the timelines provided under the
GENIUS Act. Proposed paragraph (h)(2) would provide the timing for such
a hearing. It would state that upon receipt of a timely request for a
written or oral hearing, the FDIC shall issue a notice of the time and
place for the applicant to submit written materials or provide oral
testimony and oral argument. The time for the hearing would be within
30 days of receipt of the request for hearing, in accordance with the
required timeline of the GENIUS Act. Proposed paragraph (h)(3) would
state that the FDIC shall notify the applicant of its final
determination not later than 60 days after the date of a hearing, which
shall contain a statement of the basis for that determination, with
specific findings. Finally, pursuant to the GENIUS Act, proposed
paragraph (h)(4) would describe the notice provided by the FDIC if
there is no hearing. The FDIC would provide written notice to the
applicant who does not make a timely request for a hearing that the
denial of the application is the final determination. Such notice would
be
[[Page 59414]]
provided not later than 10 days after the date by which the applicant
could have requested the hearing under proposed paragraph (h)(1).
Conforming edits are also proposed in Sec. 303.11(f) to cross
reference the process under proposed Sec. 303.252, which would exclude
appeals of denials under this section from existing processes and
procedures under existing 12 CFR parts 303 and 308 of the FDIC Rules
and Regulations.
C. Regarding Safe Harbor for Pending Applications
Consistent with section 5(f) of the GENIUS Act, an applicant could
request a waiver of certain requirements of the GENIUS Act regarding a
pending application. An applicant would be able to submit an
application to the FDIC pursuant to proposed Sec. 330.252 upon a final
rule becoming effective, which is anticipated to be prior to the
effective date of the GENIUS Act. If an applicant files an application
ahead of the effective date of the Act, pursuant to section 5(f) of the
Act, the applicant may request a waiver from the FDIC from all or some
of the requirements under the Act, with any granted waiver not to
exceed 12 months from the effective date of the Act. The FDIC would
invite an applicant to submit, together with an application, a written
request for a waiver in writing that explains the basis for the
request, the extent of the requirements to be waived, and the time
period sought. The FDIC has determined not to include a provision
regarding procedures for requesting a waiver under the GENIUS Act's
safe harbor provision due to the temporary nature of the provision and
the case-by-case analysis required for any waiver.
IV. Expected Effects
As previously discussed, the FDIC is proposing to amend its
regulations to implement application requirements and procedures for an
FDIC-supervised institution to request approval to issue payment
stablecoins through a subsidiary in accordance with provisions of the
GENIUS Act. The proposed rule would establish application requirements
and procedures to address the factors for consideration as outlined in
12 U.S.C. 5904(c).
To estimate the expected effects of the proposed rule, this
analysis considered all relevant regulations applicable to FDIC-
supervised institutions, as well as information on the financial
condition of FDIC-supervised institutions as of the quarter ending
September 30, 2025, as the baseline to which the effects of the
proposed rule are estimated.
As previously discussed, the proposed rule would apply to all FDIC-
supervised institutions that seek to issue payment stablecoins through
a subsidiary as well as engage in certain other payment stablecoin
activities permitted by the GENIUS Act.\40\ As of the quarter ending
September 30, 2025, there were 2,772 insured State nonmember banks and
State savings associations.\41\ The FDIC recognizes the significant
uncertainty regarding estimates of the number of FDIC-supervised
institutions that would seek to issue payment stablecoins or engage in
other permitted payment stablecoin activities through a subsidiary in
future periods and, thereby, be directly affected by the proposed rule.
As this is a developing market, there is uncertainty as to the number
of FDIC-supervised institutions that might apply to issue payment
stablecoins, either independently or through consortia and other
partnerships. Without predicting the actual participation rate, for the
purposes of this analysis, the FDIC assumed that 10 FDIC-supervised
institutions would file an application each year, on average.
---------------------------------------------------------------------------
\40\ See 12 U.S.C. 4903(a)(7).
\41\ FDIC Call Report Data, September 30, 2025.
---------------------------------------------------------------------------
The FDIC estimates that in applying, FDIC-supervised institutions
seeking approval to issue payment stablecoins and engage in certain
other payment stablecoin activities through a subsidiary would expend
80 labor hours to comply with the proposed application requirements. As
stated above, the intent of the proposed rule is to minimize the
regulatory burden for applicants by requesting only information
necessary to evaluate the factors to be considered under section 5(c)
of the GENIUS Act and to determine the safety and soundness of the
proposed activities of the applicant, inclusive of the activities of
its subsidiary. To the extent possible, the FDIC has tailored and
streamlined the application process and would use information already
available to it as the primary Federal regulator of the applicant
rather than requiring duplicative information to be submitted as part
of an application. At an estimated total compensation rate of $152.40
per hour,\42\ the proposed rule would result in estimated application
compliance costs of $12,192 per institution or $121,920 in aggregate
each year, on average.\43\ The FDIC believes that the application
requirements as proposed effectively balance the collection of
information necessary to address the factors for consideration
established by the GENIUS Act while containing burden on the applicant.
---------------------------------------------------------------------------
\42\ Bureau of Labor Statistics: National Industry-Specific
Occupational Employment and Wage Estimates: Industry: Credit
Intermediation and Related Activities (5221 and 5223 only) (May
2024), Employer Cost of Employee Compensation (March 2024), and
Employment Cost Index (March 2024 and June 2025). The FDIC estimates
the following labor allocation for entities complying with these
requirements: Executives and Managers (11-0000): 60 percent; Lawyers
(23-0000): 30 percent; and Clerical workers (43-0000): 10 percent.
\43\ $152.40 per hour * 80 hours = $12,192; $152.40 per hour *
80 hours * 10 = $121,920.
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V. Alternatives Considered
The FDIC is proposing to amend its regulations to implement certain
provisions of the GENIUS Act. Because the amendments are statutorily
mandated, the FDIC did not consider alternatives to the proposed rule.
VI. Regulatory Analysis
A. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency,
in connection with a proposed rule, to prepare and make available for
public comment an initial regulatory flexibility analysis that
describes the impact of the proposed rule on small entities.\44\
However, an initial regulatory flexibility analysis is not required if
the agency certifies that the proposed rule would not, if promulgated,
have a significant economic impact on a substantial number of small
entities. The Small Business Administration (SBA) has defined ``small
entities'' to include banking organizations with total assets of less
than or equal to $850 million.\45\ Generally, the FDIC considers a
significant economic impact to be a quantified effect in excess of 5
percent of total annual salaries and benefits or 2.5 percent of total
noninterest expenses. The FDIC believes that effects in excess of one
or more of these thresholds typically represent significant economic
impacts for FDIC-insured institutions.
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\44\ 5 U.S.C. 601 et seq.
\45\ The SBA defines a small banking organization as having $850
million or less in assets and determines an organization's assets by
averaging the assets reported on its four quarterly financial
statements for the preceding year. See 13 CFR 121.201 (as amended by
87 FR 69118, effective December 19, 2022). Following these
regulations, the FDIC uses an FDIC-supervised institution's
affiliated and acquired assets, averaged over the preceding four
quarters, to determine whether the FDIC-supervised institution is
``small'' for the purposes of the RFA.
---------------------------------------------------------------------------
To estimate the expected effects of the proposed rule, this
analysis considered all relevant regulations applicable to FDIC-
supervised institutions, as well as information on the financial
condition of such FDIC-supervised institutions as of the quarter ending
June 30, 2025.
[[Page 59415]]
As previously discussed, the proposed rule would apply to all FDIC-
supervised institutions that seek to issue payment stablecoins through
a subsidiary as well as engage in certain other payment stablecoin
activities permitted by the GENIUS Act.\46\ As of the quarter ending
June 30, 2025, there were 2,802 insured State nonmember banks and State
savings associations. Of those institutions, 2,085 are considered
``small'' for the purposes of RFA.\47\ The FDIC recognizes the
considerable uncertainty regarding estimates of the number of FDIC-
supervised institutions that would seek to issue payment stablecoins or
engage in other permitted payment stablecoin activities through a
subsidiary in future periods and, thereby, be directly affected by the
proposed rule. As this is a developing market, there is uncertainty as
to the number of FDIC-supervised institutions that might apply to issue
payment stablecoins, either independently or through consortia and
other partnerships. Without predicting the actual participation rate,
for the purposes of this analysis the FDIC assumed that all 10
estimated annual applicants seeking to issue payment stablecoins
through a subsidiary would be small, FDIC-supervised institutions.
---------------------------------------------------------------------------
\46\ See 12 U.S.C. 5903(a)(7).
\47\ FDIC Call Report Data, June 30, 2025.
---------------------------------------------------------------------------
As previously discussed, the FDIC estimates that FDIC-supervised
institutions seeking approval to issue payment stablecoins through a
subsidiary would expend 80 labor hours to comply with the proposed
application requirements. At an estimated total compensation rate of
$152.40 per hour,\48\ the proposed rule would result in application
compliance costs of $12,192 per small, FDIC-supervised institution or
$121,920 in aggregate, on average.\49\ Estimated application costs of
$12,192 per small, FDIC-supervised institution exceeds 5 percent of
total annual salaries and benefits or 2.5 percent of total noninterest
expenses for no more than three small, FDIC-supervised
institutions.\50\
---------------------------------------------------------------------------
\48\ Bureau of Labor Statistics: National Industry-Specific
Occupational Employment and Wage Estimates: Industry: Credit
Intermediation and Related Activities (5221 and 5223 only) (May
2024), Employer Cost of Employee Compensation (March 2024), and
Employment Cost Index (March 2024 and June 2025). The FDIC estimates
the following labor allocation for entities complying with these
requirements: Executives and Managers (11-0000): 60 percent; Lawyers
(23-0000): 30 percent; and Clerical workers (43-0000): 10 percent.
\49\ $152.40 per hour * 80 hours = $12,192; $152.40 per hour *
80 hours * 10 = $121,920.
\50\ FDIC Call Report Data, June 30, 2025.
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In light of the foregoing, the FDIC certifies that the proposed
rule would not have a significant economic impact on a substantial
number of small entities. Accordingly, an initial regulatory
flexibility analysis is not required.
The FDIC invites comments on all aspects of the supporting
information provided in this RFA section. The FDIC is particularly
interested in comments on any significant effects on small entities
that the agency has not identified.
B. Paperwork Reduction Act
Certain provisions of the proposed rule contain ``collections of
information'' within the meaning of the Paperwork Reduction Act (PRA)
of 1995.\51\ In accordance with the requirements of the PRA, the FDIC
may not conduct or sponsor, and the respondent is not required to
respond to, an information collection unless it displays a currently
valid Office of Management and Budget (OMB) control number. The
information collections contained in the proposed rule have been
submitted to OMB for review and approval by the FDIC under section
3507(d) of the PRA \52\ and 5 CFR 1320.11 of OMB's implementing
regulations.\53\ The FDIC is proposing a new information collection.
---------------------------------------------------------------------------
\51\ 44 U.S.C. 3501 et seq.
\52\ 44 U.S.C. 3507(d).
\53\ 5 CFR 1320.
---------------------------------------------------------------------------
Title of information Collection: Payment stablecoin issuer
application for FDIC-supervised institutions.
OMB Number: 3064-NEW.
Frequency of Response: Periodic--see table below.
Affected Public: Businesses or other for-profit.
Respondents: Insured State nonmember banks and insured State
savings associations that seek to issue payment stablecoins through a
subsidiary.
Current Actions: The proposed rule would establish procedures to be
followed by an insured State nonmember bank or State savings
association that seeks to obtain FDIC approval to issue payment
stablecoins through a subsidiary pursuant to the GENIUS Act.
FDIC Summary of Estimated Annual Burden
[OMB No. 3064-NEW]
----------------------------------------------------------------------------------------------------------------
Type of burden Number of Average time
Information Collection (IC) (frequency of Number of responses per per response Annual burden
(obligation to respond) response) respondents respondent (hours) (hours)
----------------------------------------------------------------------------------------------------------------
1. Application to issue Reporting (One 10 1 80 800
payment stablecoins 12 CFR Time).
303.252 (Mandatory).
---------------------------------------------------------------
Total Annual Burden ................ .............. .............. .............. 800
(Hours).
----------------------------------------------------------------------------------------------------------------
Source: FDIC.
Note: The estimated annual IC time burden is the product, rounded to the nearest hour, of the estimated annual
number of responses and the estimated time per response for a given IC. The estimated annual number of
responses is the product, rounded to the nearest whole number, of the estimated annual number of respondents
and the estimated annual number of responses per respondent. This methodology ensures the estimated annual
burdens in the table are consistent with the values recorded in OMB's consolidated information system.
Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the FDIC's functions, including whether the
information has practical utility;
(b) The accuracy of the estimate of the burden of the information
collection, including the validity of the methodology and assumptions
used;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected; and
(d) Ways to minimize the burden of the information collection on
respondents, including through the use of automated collection
techniques or other forms of information technology.
All comments will become a matter of public record. Comments on
aspects of this document that may affect reporting, recordkeeping, or
disclosure requirements and burden estimates should be sent to the
address listed in
[[Page 59416]]
the ADDRESSES section of this document. Written comments and
recommendations for this information collection also should be sent
within 60 days of publication of this document to www.reginfo.gov/public/do/PRAMain. Find this particular information collection by
selecting ``Currently under 60-day Review--Open for Public Comments''
or by using the search function.
C. Plain Language
Section 722 of the Gramm-Leach-Bliley Act \54\ requires the Federal
banking agencies to use plain language in all proposed and final rules
published after January 1, 2000. The FDIC invites your comments on how
to make the proposed rule easier to understand. For example:
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\54\ Public Law 106-102, section 722, 113 Stat. 1338, 1471
(1999), 12 U.S.C. 4809.
---------------------------------------------------------------------------
Has the FDIC organized the material to suit your needs? If
not, how could the proposed rule be more clearly stated?
Are the requirements in the proposed rule clearly stated?
If not, how could the proposed rule be more clearly stated?
Does the proposed rule contain language or jargon that is
not clear? If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the proposed rule easier to
understand? If so, what changes to the format would make the proposed
rule easier to understand?
What else could the FDIC do to make the proposed rule
easier to understand?
D. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (RCDRIA),\55\ in determining the
effective date and administrative compliance requirements for new
regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions,\56\ each Federal
banking agency must consider, consistent with principles of safety and
soundness and the public interest, any administrative burdens that such
regulations would place on affected depository institutions, including
small depository institutions, and customers of depository
institutions, as well as the benefits of such regulations. In addition,
section 302(b) of the RCDRIA requires new regulations and amendments to
regulations that impose additional reporting, disclosures, or other new
requirements on insured depository institutions generally to take
effect on the first day of a calendar quarter that begins on or after
the date on which the regulations are published in final form. The FDIC
invites comments that further will inform its consideration of the
RCDRIA.\57\
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\55\ 12 U.S.C. 4802(a).
\56\ For purposes of this analysis and consistent with RCDRIA,
``insured depository institution'' refers to the definition for that
term used in section 3 of the FDI Act.
\57\ 12 U.S.C. 4802(b).
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F. Executive Order 12866 and 14192
Executive Order 12866, as amended, directs agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. This proposed rule was drafted and reviewed in accordance
with Executive Order 12866. Within OMB, the Office of Information and
Regulatory Affairs (OIRA) has determined that this rulemaking is a
``significant regulatory action'' under section 3(f) of Executive Order
12866. Accordingly, the draft rule was submitted to OIRA for review. As
noted in other sections of the SUPPLEMENTARY INFORMATION of this
document, the FDIC has assessed the costs and benefits of this
rulemaking and has made a reasoned determination that the benefits of
this rulemaking justify its costs. This proposed rule, if finalized as
proposed, is not expected to be a regulatory action under Executive
Order 14192 because it imposes no more than de minimis costs.
VII. Request for Comment
The FDIC invites comments on all aspects of this proposed
rulemaking. In particular, the FDIC seeks feedback on the scope of the
proposed rule and its requirements, and responses to the following
specific questions:
Question 1: Does the proposed rule adequately reflect the
application process outlined by Congress in the GENIUS Act? How could
the proposed rule be improved to better align with the GENIUS Act's
application requirements?
Question 2: The proposed rule would require applicants to submit a
letter application. Should the FDIC consider requiring applicants to
instead submit a structured form to be developed by the FDIC? What are
the advantages and disadvantages of each approach?
Question 3: Are the proposed filing content requirements
appropriate to garner sufficient information for the FDIC to evaluate
the factors described in section 5(c) of the GENIUS Act? Is it clear
what information the FDIC would expect the contents of a filing to
contain under the proposed rule? Are there additional types of
information the FDIC should consider? Should the FDIC seek to remove
any of the proposed types of information? If so, please explain how the
addition or removal of such information would facilitate the FDIC's
consideration of the factors.
Question 4: Among the factors to be considered and listed in
section 5(c), the FDIC may establish any other factors to be
considered. The FDIC is not proposing to establish other factors beyond
those listed in the GENIUS Act as indicated by the proposed rule.
Should the FDIC consider other factors? If so, please describe the
additional factors that the FDIC should consider and why they would be
necessary to consider whether the activities of the applicant would
potentially be unsafe or unsound.
Question 5: What types of information should applicants submit to
the FDIC to substantiate the sufficiency of their capital or liquidity
structures? What information can best demonstrate the appropriate
composition, custody, and valuation of the reserve assets backing the
payment stablecoin?
Question 6: What types of ownership or control structures of PPSIs
may be proposed that the FDIC has not considered? Does the proposed
rule capture the types of information the FDIC would need about such
ownership or control structures to evaluate the factors? Why or why
not?
Question 7: Does the proposed rule effectively capture the types of
policies, procedures, and customer agreements of the applicant and/or
PPSI necessary to evaluate the factors? What information could be
eliminated or added in the proposed rule to allow the FDIC to evaluate
the factors while minimizing application burden?
Question 8: The FDIC has determined not to include a provision in
the proposed regulatory text regarding procedures for requesting a
waiver under the GENIUS Act's safe harbor provision due to the
temporary nature of the provision and the case-by-case analysis
required for any waiver. Should the FDIC include regulatory text on
this provision? Why or why not? In what circumstances might an
applicant request a waiver of provisions of the GENIUS Act, and what
provisions would the applicant request to be waived?
Question 9: Does the proposed appeal process effectively protect an
applicant's due process, minimize regulatory burden, and meet the
requirements of the GENIUS Act? Are
[[Page 59417]]
there any other possible processes that could be used for appeals of
denied applications?
Question 10: Are the estimate of the number of applications
received under this section and the potential costs of such
applications likely to be accurate? Why or why not?
Question 11: Would the proposed rule have any costs, benefits, or
other effects that the FDIC has not identified?
List of Subjects in 12 CFR Part 303
Administrative practice and procedure, Bank deposit insurance,
Banks, banking, Reporting and recordkeeping requirements, Savings
associations.
Authority and Issuance
For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation proposes to amend 12 CFR part 303 as follows:
PART 303--FILING PROCEDURES
0
1. Revise the authority citation for part 303 to read as follows:
Authority: 12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819(a)
(Seventh and Tenth), 1820, 1823, 1828, 1829, 1831a, 1831e, 1831o,
1831p-1, 1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5414, 5415,
5904, 5913, and 15 U.S.C. 1601-1607.
0
2. Amend Sec. 303.11 by revising paragraph (f)(1) to read as follows:
Sec. 303.11 Decisions.
* * * * *
(f) * * *
(1) General. Appeal procedures for a denial of a change in bank
control (subpart E), change in senior executive officer or board of
directors (subpart F), or denial of an application pursuant to section
19 of the FDI Act (subpart L) are contained in 12 CFR part 308,
subparts D, L, and M, respectively. Appeal procedures for a denial of
an application pursuant to section 5 of the Guiding and Establishing
National Innovation for U.S. Stablecoins (GENIUS) Act are contained in
Sec. 303.252. For all other filings covered by this chapter for which
appeal procedures are not provided by regulation or other written
guidance, the procedures specified in paragraphs (f)(2) and (3) of this
section shall apply. A decision to deny a request for a hearing is a
final agency determination and is not appealable.
* * * * *
0
3. Add Sec. 303.252 to read as follows:
Sec. 303.252 Permitted payment stablecoin issuers.
(a) Scope. This section sets forth the application requirements and
procedures for an FDIC-insured State nonmember bank or an FDIC-insured
State savings association to submit an application to the FDIC to issue
payment stablecoins through a subsidiary that shall become a permitted
payment stablecoin issuer under the Guiding and Establishing National
Innovation for U.S. Stablecoins Act (12 U.S.C. 5901 et seq.) (GENIUS
Act).
(b) Definitions. For purposes of this section:
(1) Applicant means an insured State nonmember bank or an insured
State savings association that seeks to issue payment stablecoins
through a subsidiary.
(2) Digital asset service provider has the meaning given that term
in section 2(7) of the GENIUS Act (12 U.S.C. 5901(7)).
(3) Payment stablecoin has the meaning given that term in section
2(22) of the GENIUS Act (12 U.S.C. 5901(22)).
(4) Permitted payment stablecoin issuer has the meaning given that
term in section 2(23) of the GENIUS Act (12 U.S.C. 5901(23)).
(5) State nonmember bank has the meaning given that term in section
3 of the Federal Deposit Insurance Act (FDI Act) (12 U.S.C. 1813).
(6) State savings association has the meaning given such term in 3
of the FDI Act.
(7) Subsidiary has the meaning given that term in section 3 of the
FDI Act.
(8) Substantially complete means, consistent with section
5(d)(1)(B)(i) of the GENIUS Act (12 U.S.C. 5904(d)(1)(B)(i)), 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 (12 U.S.C. 5904(c)).
(c) Filing location. Applications under this section shall be filed
with the appropriate FDIC region.
(d) Contents of filing. The application shall contain the following
information, to the extent applicable, necessary to evaluate the
factors as set forth in section 5(c) of the GENIUS Act:
(1) A description of the proposed payment stablecoin and proposed
activities of the subsidiary of the applicant, including related
activities of the applicant, how the subsidiary plans to maintain the
proposed payment stablecoin's stable value or the reasonable
expectation thereof, and any proposed activities incidental to payment
stablecoin activities or digital asset service provider activities;
(2) Relevant financial information for the subsidiary, including
planned capital and liquidity structure; reserve assets and composition
and associated asset management plan; and financial projections for the
first three years of operations;
(3) A description of the subsidiary's ownership and control
structure; organizing documents; and a list of the subsidiary's
proposed directors, officers, and principal shareholders (if different
from the applicant), including a statement as to whether any of the
proposed directors and officers have been convicted of a felony offense
involving insider trading, embezzlement, cybercrime, money laundering,
financing of terrorism, or financial fraud;
(4) Relevant policies and procedures and customer agreements,
including for custody and safekeeping; segregating customer and reserve
assets; recordkeeping; reconciliation and transaction processing;
redemption pursuant to section 4(a)(1)(B) of the GENIUS Act (12 U.S.C.
5903(a)(1)(B)); and Bank Secrecy Act/anti-money laundering/countering
the financing of terrorism and economic sanctions requirements pursuant
to section 4(a)(5) of the GENIUS Act (12 U.S.C. 5903(a)(5)); and
(5) An engagement letter with a registered public accounting firm.
(e) Additional information for applications. The FDIC may request
additional information as it deems necessary solely for its
consideration of the factors listed in section 5(c) of the GENIUS Act.
(f) Processing--(1) Substantially complete. The FDIC shall notify
the applicant as to whether the application is considered substantially
complete not later than 30 days after receiving an application under
this section. If the application is not considered substantially
complete, the FDIC shall specify the additional information the
applicant shall provide in order for the application to be considered
substantially complete. If the FDIC fails to notify the applicant
within 30 days after receiving an application, the application shall be
deemed substantially complete as of the date it was received by the
FDIC.
(2) Material change in circumstances. Following notification by the
FDIC that the application is considered substantially complete, the
applicant shall notify the FDIC if there is a material change in
circumstances, such as a change in financial or other condition, that
would require the FDIC to treat the pending application as a new
application.
(g) Decisions. The FDIC shall approve or deny an application not
later than 120 days after receiving a substantially complete
application under this section.
[[Page 59418]]
(1) Deemed approval. If the FDIC does not render a decision on a
substantially complete application within 120 days of receiving a
substantially complete application, the application shall be deemed
approved.
(2) Approval with conditions. The FDIC may impose conditions upon
approving an application, including the standard conditions defined
under Sec. 303.2(bb). The FDIC shall not, by means of conditions,
impose requirements in addition to the requirements of section 4 of the
GENIUS Act (12 U.S.C. 5903).
(3) Denial. The FDIC shall deny a substantially complete
application if the activities of the applicant would be unsafe or
unsound based on the factors described in section 5(c) of the GENIUS
Act. The FDIC shall provide the applicant with written notice of the
basis for denial not later than 30 days after the date of such denial,
explaining the denial with specificity. This explanation shall include
all findings made by the FDIC with respect to all identified material
shortcomings in the application, including recommendations to address
such shortcomings. Denial of an application under this section shall
not prohibit the applicant from filing a subsequent application.
(h) Hearing and appeal procedures; final determination--(1) Appeal
and request for hearing. Not later than 30 days after the date of
receipt of a denial of an application under this section, the applicant
may request, in writing, a written or oral hearing pursuant to the
FDIC's process for appealing material supervisory determinations.
(2) Timing. Upon receipt of a timely request for a written or oral
hearing, the FDIC shall issue a notice of the time and place for the
applicant to submit written materials or provide oral testimony and
oral argument. The time for the hearing shall be within 30 days of
receipt of the request for hearing.
(3) Final determination after appeal. The FDIC shall notify the
applicant of its final determination not later than 60 days after the
date of a hearing under paragraph (h)(2) of this section, which shall
contain a statement of the basis for that determination, with specific
findings.
(4) Notice if no hearing. The FDIC shall provide a written notice
to an applicant who does not make a timely request for a hearing under
paragraph (h)(1) of this section that the denial of the application is
a final determination. The FDIC shall provide the written notice not
later than 10 days after the date by which the applicant could have
requested a hearing under paragraph (h)(1) of this section.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on December 16, 2025.
Debra A. Decker,
Executive Secretary.
[FR Doc. 2025-23510 Filed 12-18-25; 8:45 am]
BILLING CODE 6714-01-P