The FDIC has the opportunity to create a strong framework for payment stablecoins, as long as the agency’s rules remain faithful to the language and intent of the GENIUS Act. Our core message in The Digital Chamber’s cautionary feedback to the FDIC is simple: do not add requirements Congress did not include, create inconsistent standards across regulators, or turn the stablecoin framework into a broader bank-style capital, deposit-allocation, or anti-innovation regime. You can read our full letter of recommendations HERE, but below are a few of the notable recommendations from our submission:  

A quick summary of several key points the FDIC should address: 

1. The FDIC should harmonize its definitions and regulatory standards. 

• The Office of the Comptroller of the Currency (OCC), Federal Reserve, and National Credit Union Administration (NCUA) should ensure that similarly situated issuers are not treated differently based solely on their primary regulator. 

• Similarly, complex issues around tokenized deposits, deposit tokens, and the boundary between bank deposits and payment stablecoins must be addressed through harmonized rules and guidance across regulators, rather than resolved indirectly through this FDIC proposal. 

2. We recommended changes to several definitions: 

• The FDIC’s proposed definition of “insured depository institution” may be too narrow and could unintentionally exclude certain federally supervised banking institutions, including certain U.S. branches of foreign banks, from serving as reserve counterparties.  

• Additionally, we recommended refining the definitions for “eligible financial institution,” “public distributed ledger,” “smart contract,” and “payment stablecoin holder.”  

3. Expanding issuer obligations to downstream stablecoin holders with no direct relationship to the issuer did not make sense. As such, we emphasized that regulatory obligations should correlate with direct customer relationships, and that downstream users should be protected through disclosures, redemption rights, and reserve requirements. 

4. We urged the FDIC to allow stablecoin issuers to engage in activities related to issuance, redemption, reserve management, custody, smart contract deployment, blockchain infrastructure, cross-chain functionality, and operational risk management. 

5. Our response supported reserve identification, traceability, segregation, audits, and redemption protections that make sense.  

• However, we noted that mandating a single legal structure, custody model, Simplified Payment Verification (SPV), or reserve management approach that does not align with that recommendation. This will give issuers flexibility to meet statutory requirements through different legally effective structures. 

6. Finally, we noted that adding capital-like reserve buffers, standardized haircuts, automatic liquidation requirements, or rigid caps beyond the GENIUS Act was concerning. The statute already establishes a strict reserve framework, and additional requirements could reduce liquidity and limit competition. 
    

Overall, the strong supervision, full-reserve backing, redemption rights, transparency, and risk management in the NPRM all form a sensible implementation proposal aligned with Congressional intent. Our repeated stance in our response letter is that inconsistent treatment across agencies and requirements that would undermine the competitive and innovative framework Congress intended in passing the GENIUS Act should not be a part of the final version of the FDIC rules. 

Read our full response here.