Fed Proposes Full Reserve Rules for Stablecoin Issuers

Summary

• The Federal Reserve released a proposal on September 24 2026 that requires supervised payment stablecoin issuers to hold full reserves in short-term Treasuries and other permitted assets.
• The measure forms part of the GENIUS Act framework and carries a comment period that ends May 1 2026.
• European regulators at ESMA will begin expanded supervision of AI and tokenization at crypto firms in 2027, creating parallel timelines across the Atlantic.

The Federal Reserve proposed on September 24 2026 that Board-supervised payment stablecoin issuers must fully back every token with permissible reserves. The rule targets issuers that fall under the GENIUS Act. It limits holdings to short-term Treasuries along with other approved instruments.

The move arrives as the European Securities and Markets Authority prepares to widen its digital-innovation oversight to include AI tools and tokenization starting in 2027. Together the steps signal coordinated pressure on stablecoin and crypto-asset operations on both sides of the Atlantic.

Context

Stablecoin markets have grown rapidly while existing reserve practices remain uneven. The Federal Reserve proposal seeks to reduce that gap by imposing a uniform standard on the largest supervised issuers. ESMA’s 2027 priority list extends similar logic to technology risks.

Supervisors will first build internal expertise before applying new checks to smaller firms and crypto-asset service providers. The two initiatives therefore address reserve safety in the United States and operational resilience in Europe on overlapping but separate schedules.

Details

The Federal Reserve plan would require issuers to maintain one-to-one backing at all times. Permissible assets include short-term U.S. Treasuries and other instruments the Board deems low-risk. A parallel proposal covers additional supervisory requirements for these entities.

Commentators note that the May 1 2026 comment deadline leaves the final implementation date unclear. ESMA’s program by contrast begins formally in 2027 and will gradually cover a wider set of firms. The staggered timelines mean U.S. stablecoin issuers face nearer-term reserve obligations while European crypto platforms prepare for technology-focused reviews.

"The first proposal would require that Board-supervised payment stablecoin issuers fully back their stablecoins with certain permissible reserve assets."

, Federal Reserve Board (www.federalreserve.gov)

Market participants have not issued coordinated public reactions in the immediate days after the announcement. Industry groups are expected to submit formal comments before the May deadline.

The Fed proposal and the ESMA 2027 work program will continue through their respective comment and preparation phases. Observers will watch whether final U.S. rules retain the full-reserve requirement. They will also track how European supervisors translate AI and tokenization priorities into concrete examinations.