FDIC Mandates 1:1 Reserves for Stablecoins Under GENIUS Act

A New Regulatory Framework for Digital Assets

In a pivotal move for the intersection of traditional finance and digital assets, the Federal Deposit Insurance Corporation (FDIC) officially approved a notice of proposed rulemaking on April 7, 2026. This mandate serves as the cornerstone for implementing the GENIUS Act, a legislative framework designed to integrate stablecoin issuance into the regulated banking sector. By establishing rigorous standards for reserve transparency, liquidity, and risk management, the FDIC is signaling a clear intent to institutionalize stablecoin operations within the existing financial safety net.

For market participants, this development marks the end of a period of regulatory ambiguity. For years, the stablecoin market has operated in a gray area, often divorced from the stringent capital requirements governing commercial banks. The GENIUS Act rules now bridge this gap, ensuring that any stablecoin issued by a bank-affiliated entity meets the same safety and soundness criteria as traditional deposit products.

The Core Pillars: Reserves and Liquidity

Central to the FDIC’s proposal are two aggressive requirements that aim to eliminate the "run risk" historically associated with digital assets. First, the proposal mandates a 1:1 reserve ratio. Issuers must maintain high-quality, liquid assets that fully collateralize the outstanding supply of stablecoins at all times. This move is intended to prevent the decoupling events that have plagued non-bank issuers in the past.

Equally critical is the new redemption mandate. Under the proposed rules, issuers are required to guarantee redemptions within a two-day window. This liquidity requirement is designed to provide holders with near-immediate access to their capital, mirroring the expectations consumers have for standard bank deposits. By enforcing these timelines, the FDIC is effectively treating stablecoins as "digital cash" rather than speculative investment vehicles.