FDIC proposes process for banks to issue stablecoins

Core Insights - The Federal Deposit Insurance Corp. (FDIC) has proposed a rule to establish a process for banks to issue payment stablecoins under the GENIUS Act [1][9] - The proposed rule includes a tailored application process for stablecoin issuance, allowing for automatic approval of applications after 120 days if the FDIC does not act [2][9] Application Process - The new rule will add a section to Part 303 of the FDIC's regulations, detailing the criteria for stablecoin issuance applications [2] - Applications can only be denied if the proposed activity is deemed manifestly unsafe or unsound, with a requirement for the FDIC to notify applicants of their application status within 30 days [2][3] Regulatory Clarity - The FDIC aims to provide regulatory clarity regarding digital assets and tokenized deposits, with further rules expected to establish capital, liquidity, and risk management requirements for banks issuing stablecoins [3][4] Disclosure Requirements - Banks will need to submit detailed disclosures regarding reserves, capital, liquidity, governance, and anti-money laundering controls, while the FDIC will minimize duplicative paperwork [4] Special Assessments - The FDIC voted to reduce special assessments from banks to cover losses from recent bank failures, adjusting the rate from 3.36 basis points to 2.97 basis points [6][8] - Estimated losses from the failures of Silicon Valley Bank and Signature Bank are approximately $16.7 billion, slightly up from the previous estimate of $16.3 billion [7] Budget Reduction - The FDIC proposed a budget reduction of $436.7 million, a 16% decrease from 2025 spending levels, primarily through cuts in employee compensation and a reduction of over 1,300 employees [10][11]