Fed Issues Twin GENIUS Act Stablecoin NPRMs

What Happened

On September 24, 2026, the Board announced two NPRMs implementing the GENIUS Act, the 2025 law that established a federal framework to regulate payment stablecoins in the U.S. Document 2026-19860 (Docket R-1899 / RIN 7100-AH29), "Implementing the Federal Reserve Board's Responsibilities under the GENIUS Act," would set standards for Board-supervised permitted payment stablecoin issuers. The standards cover reserve assets, redemption and fees, risk management, capital, custody and safekeeping, permissible and prohibited activities, and the GENIUS Act tying prohibition. Document 2026-19899 (Docket R-1900 / RIN 7100-AH30), "Application Procedures for Board-Supervised Insured Depository Institutions Seeking Approval for a Subsidiary to Issue Payment Stablecoins," would set out how an insured State member bank applies for Board approval for a subsidiary to engage in stablecoin issuance. It covers application contents, the review process, a safe harbor for pending applications, and appeals. Both documents were filed for Public Inspection on September 28 and are scheduled for Federal Register publication on September 29. The Federal Reserve is one of several regulators implementing the statute. The Office of the Comptroller of the Currency (OCC), for example, oversees other categories of issuers, including subsidiaries of national banks.

Why This Is Trending Now

For firms seeking regulatory clarity, Public Inspection provides the first published insight into the Fed's two GENIUS rulemaking documents. Until the pages of the Federal Register are made available, the Public Inspection PDFs and the Board's press release of September 24 are the main sources of information. The comment period starts on the date the rules are published in the Federal Register, not on the day that Public Inspection goes live. Timing also matters. Under the statute, the GENIUS Act takes effect on the earlier of January 18, 2027 (18 months after enactment) or 120 days after the primary federal regulators issue final implementing regulations. How quickly the Board and other regulators finalize their rules will shape the implementation timeline.

Why Businesses Should Pay Attention

Banks, crypto companies, and other entities planning Board-supervised payment stablecoin activity should track both proposals: the one setting stablecoin issuer standards and the one governing the bank-subsidiary application process. The proposals address payment stablecoins, not bitcoin or other digital assets that are not pegged to a fixed monetary value. The first proposal would require every coin outstanding to be fully backed by reserves, using certain allowed types of reserve assets such as short-term Treasury bills and other high-quality liquid assets. It would also establish redemption mechanics, capital requirements, risk-management responsibilities, and safekeeping obligations. The second proposal would ask applicant institutions to submit a business plan, financial information, and other documents, and would include an appeals procedure. Neither of the proposals is final, and the regulator may amend them after considering the comments. The GENIUS Act system goes beyond the issuer. Under the statute, permitted payment stablecoin issuers are regarded as financial institutions for the purpose of the Bank Secrecy Act (BSA), which brings AML compliance obligations administered by FinCEN. The statute also requires issuers to maintain sanctions compliance programs and the technical capability to comply with lawful orders, such as orders to freeze tokens. These safeguards are aimed at money laundering and sanctions evasion. In addition, the statute limits the way in which digital asset service providers and other intermediaries, such as exchanges, may offer stablecoins that are not issued by a permitted payment stablecoin issuer; that restriction takes effect three years after enactment, in July 2028. Companies should consider the Fed's two NPRMs together with the statutory requirements and any rules issued by other agencies, such as the OCC and FinCEN.

Practical Considerations

Treat the two documents as NPRMs. Do not assume the rules on reserves, capital, activity, or application procedures will take effect as proposed. Calendar the comment deadline for 60 days after the documents are published in the Federal Register (approximately November 28, 2026, if the scheduled September 29 publication date holds), and confirm the exact date once the Federal Register pages are available online. Firms that want to shape the final rule should begin preparing a comment letter early. Financial institutions that wish to obtain Board approval for a payment stablecoin subsidiary should compare the proposed application requirements with their present plans and the operational reality of running a stablecoin business. Stablecoin issuers and custodians should examine the proposed reserve, safekeeping, and tying provisions against their current product design, including the way the token moves through their blockchain infrastructure and payment rails in the contexts of transfer, transaction, and settlement.

Cogent Law Perspective

Cogent Law's teams that specialize in FinTech, banking, and money transmission are monitoring both GENIUS NPRMs, since they constitute the Board's initial detailed implementation package for payment stablecoin issuers subject to Board supervision. We assist our clients in evaluating the possible impact of the proposals on product design and on their charter, money transmitter license, and subsidiary strategy. We also help them formulate a comment strategy during the open period and prepare to comply once the rules are final.

Key Takeaways

• The Federal Reserve has published two proposed rules under the GENIUS Act for issuers of payment stablecoins that are supervised by the Board; these are proposed rules only and not final rules.
• Doc 2026-19860 includes provisions relating to issuer standards (covering reserves, capital, risk management, safekeeping, permissible activities, and tying).
• Doc 2026-19899 explains the procedure that insured State member banks would follow when applying for approval of a payment stablecoin subsidiary.
• The comment deadline is 60 days after Federal Register publication (approximately November 28, 2026, if the September 29 publication date holds); confirm the exact date once the Federal Register pages go live.
• The GENIUS Act takes effect on the earlier of January 18, 2027, or 120 days after final implementing regulations are issued.

Related Practice Areas