September 24, 2026
The Federal Reserve proposed rules requiring stablecoin issuers to hold full reserve backing, shifting $500 billion in market value.
What happened
The Federal Reserve Board opened public comment on stablecoin proposals under the GENIUS Act. The rules call for supervised issuers to maintain full cash or cash-equivalent reserves for every token and meet new capital standards. The news moved roughly $500 billion of market value across the affected sectors.
Why it matters
Full reserve backing removes the credit and liquidity transformation that makes stablecoin balance sheets profitable. Forced one-to-one backing turns issuers into narrow payment rails rather than yield-earning intermediaries, crunching their revenue model and potentially shrinking the dollar digital-money supply they can offer.
The case against
Supervised full reserves could make stablecoins boring enough to be trusted at scale, unlocking broader institutional adoption. The proposal also treats them as a serious piece of the payment system, which may increase their legal standing and usage once the rules are final.
What settles it
The final reserve composition rule, specifically whether the Fed allows only cash or permits short-dated Treasuries and what haircuts it applies to them.