Fed proposes GENIUS Act rules: $1 reserves per stablecoin dollar, two-day redemptions
By Crypto Wire
September 24, 2026
The Federal Reserve released proposed rules on September 24, 2026 to implement the GENIUS Act for bank-issued payment stablecoins, according to Bitcoin.com’s wrap of the Thursday proposals. Fed-supervised issuers would need at least $1 of permitted reserves behind every $1 of payment stablecoins outstanding, generally redeem customers within two business days, and—if capital stays short long enough—liquidate reserves and redeem every coin. A companion filing would let insured state member banks seek Fed approval for stablecoin-issuing subsidiaries on a 120-day decision clock. For Plain English Policy, that is today’s unused regulatory tape—distinct from the Sep. 16 evergreen retail explainer (LN 8404) and from Uyeda’s credibility remarks already filed this OC day.
What “fully backed” would mean in the proposal. Bitcoin.com summarizes that permitted reserves could include U.S. dollars, Federal Reserve Bank balances, certain bank deposits, Treasury securities with 93 days or less remaining to maturity, qualifying repurchase agreements, and eligible investment funds—plus tokenized versions of some permitted assets. Reserves would have to stay segregated from the issuer’s other assets. If backing slips below one-to-one, the issuer would have to notify the Fed, then liquidate and redeem unless it has a prompt restoration plan and the Board directs that path. Attribute those mechanics to the proposal wraps; do not invent an effective date Congress or the Fed has not set for final rules.
Capital tests and the redemption clock. The same wrap says proposed capital charges would range from 2% on the first $20 billion of outstanding payment stablecoins to 1% on amounts above $50 billion, alongside other capital requirements. If an issuer remains below its minimum capital at the end of the following quarter, it would have to liquidate reserves and redeem. Redemption policies would generally promise payment within two business days—even for products built around near-instant settlement. That gap between crypto settlement speed and a two-day regulatory window is the plain-English friction NFT desks should track when USDC and bank-issued dollars fund marketplace bids.
How banks would apply. A companion proposal would require insured state member banks seeking Fed approval for payment-stablecoin subsidiaries to submit business plans, financials, policies, capital docs, and three-year projections. Once an application is deemed substantially complete, the GENIUS Act gives the Fed 120 days to decide—or the application is deemed approved. The Fed would have 30 days after receipt to say whether the filing is substantially complete; a material change could reset the 120-day clock. Public comments would stay open 60 days after Federal Register publication.
Why NFT and settlement readers care. Marketplace floors, vaulted-card SWAPs, and luxury twin redemptions still clear through dollar-pegged tokens. Rules that force one-to-one reserves, segregated backing, and two-day redemptions shape how reliable those rails feel under stress—and whether bank-issued payment stablecoins can compete with today’s USDC/USDT floats used for OpenSea and Magic Eden bids. Fed Gov. Michael Barr, quoted by Bitcoin.com, backed the rulemaking while pressing for clear “universal redemption rights” and better handling of interest-rate and foreign-currency risks; he also flagged discomfort with requiring an AML deficiency to be “significant or systemic” before Fed action. Publish Barr’s comments as attributed policy color, not as final text.
What not to invent: that every existing USDC or USDT issuer is already under this exact Fed package, that the proposals are final rules, that the 120-day deemed-approval clock has started for named banks, or that NFT royalties somehow sit inside this bank-stablecoin proposal. Stick to Bitcoin.com’s Thursday summary of reserve lists, capital brackets, redemption windows, application clocks, and Barr’s remarks. Leave Bitget’s hot-wallet drain (LN 9688) and HIFI’s Series A (LN 9669) closed as separate stacks. Operational hygiene while comments run: watch which bank applications actually file, whether marketplace settlement stays on non-bank stables during the comment window, and whether two-day redemption language changes how desks size CEX-to-wallet NFT floats.
Bottom line: The Fed’s Sept. 24 GENIUS Act proposals would require $1 of permitted reserves per $1 of bank payment stablecoins, two-business-day redemptions, escalating capital tests, and a 120-day bank-subsidiary approval clock—with 60 days of public comment after Federal Register publication.
Disclaimer: This article is provided for informational and educational purposes only. It does not constitute financial, investment, legal, or trading advice. The NFT market is highly volatile, and past performance is not indicative of future results. Readers should conduct their own research and consult qualified professionals before making any decisions related to digital assets. The cover image for this article may have been created using artificial intelligence (AI).
