The GENIUS Act, signed into law last July, legalized payment stablecoins as issued by regulated financial services firms. This includes traditional banks, with many poised to move into the new form of value transfer and payments. Yesterday, the Federal Deposit Insurance Corporation (FDIC) issued a notice of proposed rulemaking for application provisions as required by the GENIUS Act.
The FDIC stated that a supervised state nonmember bank or state savings association seeking to issue payment stablecoins through a subsidiary is required to apply to the FDIC for the subsidiary to be approved as a permitted payment stablecoin issuer. An approved issuer becomes a permitted payment stablecoin issuer, or PPSI.
The FDIC said the proposed rule would implement requirements for evaluating applications based on the statutory factors, processing applications within specified timeframes, and establishing an appeal process for denied applications.
The GENIUS Act, while becoming law on July 18, 2025, is expected to become effective on January 18, 2027, or 120 days after the date on which the primary Federal payment stablecoin regulators issue any final implementing regulations, if earlier.
Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.
