FDIC Proposed Rule: Application and Approval Requirements for Payment Stablecoin Issuance

Posted by Erin Hall on December 16, 2025

Rulemaking on stablecoins and the implementation of the GENIUS Act has commenced with the FDIC issuing its initial rule. The NCUA has indicated that credit unions should anticipate a substantially similar proposed rule soon, tailored specifically to their operations. GoWest is actively monitoring this process and stands ready to advocate on behalf of credit unions throughout the rulemaking period.

Initial FDIC Rule

On December 16, 2025, the Federal Deposit Insurance Corporation (FDIC) issued a proposed rule establishing formal application and approval requirements for FDIC-supervised insured depository institutions (IDIs) seeking to issue payment stablecoins through a subsidiary, as mandated by the GENIUS Act.

The proposed rule sets forth the application process for an FDIC-supervised institution to obtain approval for its subsidiary to become a Permitted Payment Stablecoin Issuer (PPSI). This framework applies to FDIC-supervised state nonmember banks and state savings associations and clarifies that stablecoins must be issued exclusively through a separately capitalized subsidiary. The FDIC will accept comments for 60 days.

Key Application Requirements

Applicants must submit a letter application to the FDIC that includes:

• A description of the proposed payment stablecoin and related activities.
• Financial information for the subsidiary, including planned capital and liquidity structure; reserve asset composition and management plan; and three-year financial projections.
• Details of the subsidiary’s ownership and control structure.
• Policies, procedures, and customer agreements addressing custody and safekeeping; segregation of customer and reserve assets; recordkeeping; reconciliation and transaction processing; and redemption policies.
• An engagement letter with a registered public accounting firm.

The proposal establishes statutory timelines for application completeness, decisions, and appeals, with most substantially complete applications expected to receive FDIC determinations within 30 days. The FDIC may also leverage existing supervisory information to minimize duplication.

More FDIC Actions Forthcoming

In a statement, FDIC Acting Chairman Travis Hill emphasized that this rule represents the first of several actions to implement the GENIUS Act. He noted that forthcoming proposals will address capital, liquidity, and risk management requirements for subsidiaries approved as PPSIs, among other GENIUS Act-related initiatives.

How It Impacts Credit Unions

Nothing in current law prevents credit unions or credit union service organizations (CUSOs) from issuing stablecoins in compliance with the GENIUS Act. Congress established a statutory framework governing stablecoin issuance, including disclosure and a minimum 1-1 reserve requirement. GENIUS also created a separate framework for prudential regulators to oversee state-regulated entities issuing less than $10 billion in stablecoin. Regulators should not exceed the scope of the statutory requirements through rulemaking.

Credit unions that meet the GENIUS Act standards should not be put at a disadvantage relative to other stablecoin issuers. GoWest will continue to monitor developments and advocate for credit unions.

Posted in Advocacy on the Move, Regulatory Advocacy.