The Fed Builds the GENIUS Act Bank-Grade Plumbing — Two NPRMs, Two Paths, One Deadline

The GENIUS Act is evolving from static legislative text into a synchronized regulatory architecture executed through parallel rulemaking. Three federal agencies are currently constructing distinct, interlocking layers of the U.S. stablecoins market: the Federal Reserve is defining the underlying technical plumbing, the Treasury is establishing rigorous standards for issuance, and the SEC is governing the offering process. Rather than merely drafting rules, these regulators are simultaneously building the foundational infrastructure that will dictate how these digital assets operate within the broader regulated financial system.

The Federal Reserve’s contribution arrived on September 24, 2026, via two Notices of Proposed Rulemaking (NPRMs) that establish the rigorous standards for Board-supervised Permitted Payment Stablecoin Issuers (PPSIs). The first proposal, proposed federal reserve rules, mandates a strict 1:1 reserve backing requirement, utilizing only high-quality, liquid assets such as U.S. currency, Treasury bills, and central bank reserves. It explicitly bans rehypothecation and imposes standardized capital requirements tailored to the issuer’s business model, rather than traditional bank-style risk-based metrics. The second proposal outlines a streamlined, albeit demanding, application process for insured state member bank subsidiaries to enter the space, promising a 120-day approval window for those that can document their reserve management and financial plans.