Fed Outlines Rules for Bank-Issued Payment Stablecoins
Published Date: 9/29/2026
Proposed Rule
Summary
The Federal Reserve is setting up clear rules for banks that want to create a subsidiary to issue payment stablecoins, a type of digital money. This affects insured banks supervised by the Fed and aims to make the process smooth and safe. Banks must follow these new steps and send comments by November 30, 2026, so get ready to join the future of money!
Analyzed Economic Effects
7 provisions identified: 2 benefits, 5 costs, 0 mixed.
Capital, reserves, and redemption proof required
Your application must show the proposed subsidiary can meet section 4 requirements, including maintaining identifiable reserves backing outstanding stablecoins on at least a one-to-one basis and publishing reserve composition monthly. You must also demonstrate sufficient initial capital and provide a longer-term capital plan and a redemption policy that discloses all fees and requires at least seven days' notice before fee changes.
Fed approval required for bank stablecoin subsidiaries
If you are an insured State member bank and want a subsidiary to issue payment stablecoins, you must file an application with the Federal Reserve. The Board proposes a new tailored application process under Regulation UU that governs who is an applicant and what information must be submitted.
120-day decision clock and deemed approval
After you submit a substantially complete application, the Board must decide within 120 days of the submission date. If the Board does not render a decision within 120 days, the application is deemed approved; the Board must notify within 30 days whether an application is substantially complete.
Background checks and biographical filings for leaders
Officers and directors must certify they have not been convicted of certain felonies, and principal shareholders and the top two decision-makers generally must submit biographical reports and fingerprints for background checks. A principal shareholder is someone who owns, controls, or can vote 10% or more of any class of voting securities.
Consortium filing flexibility for multi-bank issuers
If a stablecoin would be issued by a subsidiary owned by more than one bank (a consortium), the Board may, in exceptional circumstances, waive or change application requirements and may accept a single application on behalf of all insured State member banks if the consortium can be considered a subsidiary of each.
Uninsured State member banks excluded from Fed process
The proposed procedures would not apply to uninsured State member banks. An uninsured State member bank may instead apply to its home State payment stablecoin regulator to become a State-qualified payment stablecoin issuer.
Enforcement risk for false statements in applications
An authorized officer must certify that the application contains no material misrepresentations or omissions, and the Board may verify filings. Anyone responsible for material misrepresentations may face enforcement action, including criminal penalties under 18 U.S.C. 1001.
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Key Dates
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