On December 16th, the Federal Deposit Insurance Corporation (FDIC) became the first US regulatory body to utilize the GENIUS Act and create procedures for institutions to issue payment stablecoins. The GENIUS Act was enacted on July 18, 2025, and will become effective on January 18, 2027, so there is still time to determine how your institution will navigate the new regulatory landscape. The FDIC approval marks a significant milestone in the evolving landscape of digital currencies and their integration into the traditional financial system. As the financial sector continues to embrace innovation, the FDIC’s decision provides much-needed clarity and regulatory guidance for institutions looking to venture into the stablecoin market.
For those unfamiliar, stablecoins are digital currencies pegged to the value of a traditional currency and have been gaining traction as a means of facilitating fast and secure transactions. By establishing a clear framework for their issuance, the FDIC is paving the way for FDIC-supervised institutions to explore this emerging market with greater confidence.
At Perficient, we believe that the new procedures will drive innovation in payment systems, enhance financial inclusion, and provide consumers with more choices for conducting transactions. We also believe that the act will allow significant innovation in the Treasury Services space and allow new Treasury entrants to embrace the new state of the art technology and leap to the head of the industry, just as the adoption of smart phones and the Internet allowed new leaders to emerge in those industries.
Key Highlights in the New Regulation
Readers must know that the FDIC approved proposal refers to the subsidiary of an Insured Depository Institution (“IDI”) that has been approved to issue payment stablecoins under the GENIUS Act as a Permitted Payment Stablecoin Issuer, or “PPSI” – an acronym that will soon become widely used in the industry.
The proposal limits PPSI’s activities to:
- issuing and redeeming payment stablecoins,
- managing related reserves,
- providing payment stablecoin and reserve custodial and safekeeping services,
- and engaging in digital asset service provider activities.
The proposal sharply prohibits pledging, rehypothecating, or reusing a PPSI’s reserves assets. The PPSI’s reserves are the digital equivalent to cash in the vault.
What the FDIC Will Require
The FDIC’s proposal outlines specific requirements for stablecoin issuance by PPSIs. To be eligible, the subsidiary must:
- maintain identifiable reserves backing the outstanding payment stablecoins on at least a 1 to 1 basis,
- Maintain reserves comprised of specified categories of high-quality assets,
- Document the ability to relatedly meet the monthly reserve disclosure requirements applicable to a PPSI.
- The reserve disclosure requirements include disclosing the composition of the PPSI’s reserves on its website and
- submitting to the FDIC certified reports examined by a public accounting firm regarding the prior month’s reserve composition disclosure.
Additionally, the FDIC is required to consider the ability of the PPSI, based on financial condition and resources, to comply with forthcoming regulations to be issued by the FDIC regarding:
- capital requirements
- liquidity requirements
- reserve asset diversification
- operational, compliance, and information technology risk management principles-based requirements and standards, including but not limited to:
- Bank Secrecy Act
- Know Your Customer and
- Sanctions Standards
Therefore, while a significant landmark regulation, there are still more regulations to come before January 2027.
If your IDI is ready to start down this road as an applicant to create a state-of-the-art Treasury Payment subsidiary to issue and redeem stablecoins, you will need a partner with decades of background in the financial services industry. Perhaps one that has been trusted by 18 of the top 20 banks, 16 of the 20 largest wealth and asset management firms and are regularly recognized by leading analyst firms. If this sounds like the type of trusted partner you need to help build your Treasury Payment abilities, reach out to Perficient’s Financial Services Managing Director David Weisel to start a conversation.
