The Federal Deposit Insurance Corporation (FDIC) is moving forward with the implementation of the GENIUS Act, a federal regulatory framework for stablecoins signed into law last summer by President Donald Trump, according to media outlet The Block.

On Tuesday, the FDIC board of directors approved a notice of proposed rulemaking that establishes a formal application process for insured financial institutions seeking to issue payment stablecoins through a subsidiary. The agency is currently soliciting public comments on the proposed rule.

FDIC counsel Nicholas Simons explained that the application is designed to evaluate the safety and soundness of the proposed stablecoin activities while minimizing regulatory burden. Requirements will include scoping out activities, detailing the subsidiary’s ownership and control structure, and providing an engagement letter with a registered public accounting firm.

The GENIUS Act-formally the Guiding and Establishing National Innovation for U.S. Stablecoins– mandates that stablecoins be fully backed by U.S. dollars or similarly liquid assets. It also requires annual audits for issuers exceeding $50 billion in market capitalization.

Acting FDIC Chair Travis Hill indicated the agency plans further action, including a proposed rule in the coming months to establish specific capital, liquidity, and risk management requirements for these approved subsidiary stablecoin issuers, displaying a serious push to integrate digital assets into the traditional financial system.

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Source: https://www.theblock.co/post/382843/fdic-proposes-stablecoin-application-framework-rule-as-it-moves-forward-with-genius-act