FDIC Approves GENIUS Act Application Process for Payment Stablecoins Issuance

On October 25, 2023, the Federal Deposit Insurance Corporation (FDIC) Board of Directors approved a notice of proposed rulemaking. This notice focuses on the application process outlined in the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).

Overview of the GENIUS Act

The GENIUS Act facilitates the issuance of payment stablecoins by insured depository institutions. It allows these institutions to establish a subsidiary specifically for this purpose and engage in related operations.

Application Process for Payment Stablecoins

To issue payment stablecoins, an FDIC-supervised state nonmember bank or a state savings association must apply to the FDIC. This application is necessary for the subsidiary to be recognized as an authorized payment stablecoin issuer.

Key Requirements of the Proposed Rule

• The FDIC will evaluate applications based on specific statutory factors.
• There will be designated timeframes for processing these applications.
• An appeal process will be established for applications that are denied.

Public Commentary Period

The FDIC will welcome comments on the proposed rule for 60 days after its publication in the Federal Register. This period allows stakeholders and the public to voice their opinions on the application process under the GENIUS Act.