The Fed's new stablecoin rules: what a business should check before it takes a coin

On September 24, 2026, the Federal Reserve proposed reserve and capital rules for the payment stablecoin issuers it supervises. Those issuers would have to back their coins in full with permissible reserve assets such as short-term Treasury bills, hold capital, and meet standards for risk management and for the firms that keep the reserves. The rules are still proposals, and they reach only issuers the Fed supervises. Before you accept or settle in any stablecoin, find out who issues it, who regulates that issuer, what backs it, how you redeem it for dollars and who holds the reserves, and get those answers in writing.

What the Fed proposed

On September 24, 2026, the Federal Reserve Board asked for public comment on two proposals under the GENIUS Act, the federal law for payment stablecoins. American Banker reported that the Board vote was unanimous. Both proposals apply to payment stablecoin issuers the Board supervises, and neither is a final rule.

The first proposal sets out what has to sit behind a coin, and the second covers how a bank applies to issue one. If you have been asked whether your business can take stablecoins, the first is the one to read closely.

Proposal one: backing, capital and custody

According to the Fed, the first proposal would require Board-supervised issuers to meet these standards:

• Full backing of their stablecoins with permissible reserve assets
• Reserves in short-term Treasury bills and certain other high-quality, liquid assets
• Standardized capital requirements for credit risk and operational risk
• Risk-management standards for the issuer
• Rules for the firms that safekeep the backing assets

Each item on that list answers a way a stablecoin can fail. Reserves can sit in assets that are hard to sell quickly, an issuer can run short of capital when a loan goes bad or a system fails, and the firm holding the reserves can turn out to be the weak point. The proposal sets a standard against each of those, though only for the issuers the Fed supervises.

American Banker also reported that the proposal bars paying interest or yield solely for holding, using or retaining a payment stablecoin. That part is still a proposal too, but if someone offers you a coin that pays you just for holding it, ask which rules the issuer believes it operates under.

Proposal two: who gets to issue

The second proposal sets a tailored application process for Board-supervised banks that want to issue payment stablecoins. An applicant would file a business plan and financial information, and the process includes appeals, hearings and final determinations. A merchant will rarely deal with this part directly. What it does show is that a bank under Fed supervision would need the Fed's review and approval before it issues a coin.

Which coins these rules would cover, and which they would not

This question decides whether the Fed's proposal says anything at all about the coin a customer wants to pay you with.

The Fed's proposals apply to the issuers the Board supervises. Other issuers answer to other regulators, and the OCC, the FDIC and the NCUA each published their own implementation proposals in April 2026.

So the issuer decides which rulebook applies, and the coin's name and the app a customer pays from have no bearing on it. Two dollar stablecoins can look identical at checkout and still fall under different regulators, each with its own proposed rules, all of them still in draft. In practice that means a few things:

• "Regulated under the GENIUS Act" is half an answer, because it leaves out which regulator.
• A news story about the Fed's rules may not apply to the coin you are being offered.
• The coin's issuer and your payments provider are usually different companies with different obligations.
• A wallet, exchange or custodian holding coins for you is a third party with its own terms.

If you are an ISO or agent and a merchant asks whether they can take stablecoins, sort this out before you answer. The honest answer depends on the coin and on its issuer, and whoever converts or settles the coin for that merchant has to be able to name both.

The timeline: proposals now, a law in force by January 2027

None of this is in force yet. These are the dates the statute and the regulators have set so far:

• April 2026: the OCC, FDIC and NCUA publish their implementation proposals
• July 18, 2026: the statutory deadline for final rules passes without them
• September 24, 2026: the Fed proposes its two rules for Board-supervised issuers
• 60 days after Federal Register publication: the Fed's comment period closes
• January 18, 2027, or 120 days after final rules if that comes first: the GENIUS Act takes effect

The final rules could look different from these proposals. A comment period is there so issuers, banks and the public can argue for changes before anything is settled. The effective date, on the other hand, has an outer limit. Regulators have already missed the July 2026 deadline for final rules, but the law takes effect by January 18, 2027 whether or not those rules arrive first.

Until final rules land, the issuers you deal with are preparing for requirements that are not yet written in final form. If someone tells you a coin is "GENIUS-compliant" today, ask which rule they mean, from which regulator, and in what version.

What a Fed governor says is still unfinished

Governor Michael Barr released a statement alongside the proposals, and two points in it matter to any business thinking about taking a coin.

First, he asked that "universal redemption rights are clear in the final rule." Redemption is your right to hand the coin back to the issuer and get dollars, and for a merchant it is the reason to take a dollar stablecoin in the first place. If you cannot redeem on terms you understand, you have been paid in an asset you still have to sell. A Fed governor raised this on the day the proposals came out, which is a good reason to raise it with your own provider as well.

Second, he wrote that "further work will undoubtedly be required if stablecoins are to be reliable payment instruments." A sitting Fed governor is saying the rules on their own do not finish the job. Keep that in mind when someone tells you stablecoins are ready to replace card or ACH settlement for your business.

None of this means you should refuse coins outright. Until the rules are final and have been tested, though, the checking falls to you and to whoever you settle through. That mostly comes down to asking a short list of questions before you switch anything on.

Questions to ask before you accept or settle in a coin

When a customer pays you in a stablecoin, what you receive is a claim on the issuer, and these questions tell you how good that claim is. Put them to the issuer where you can. Put them to your payments provider every time, because the provider is the one converting, holding or passing the coin along to you.

• Who issues this coin, and who regulates the issuer? The answer decides which rulebook applies.
• What backs it? Ask for the reserve mix and how it compares with the reserve assets regulators have proposed.
• Is the backing audited, or only attested? Ask who reviews it, how often and where the reports are published.
• How do you redeem for dollars, and how long does it take? Ask who can redeem, the minimum amount, the fees and the stated timeframe.
• Who holds the reserves? Get the custodian's name and whether reserves are kept separate from the issuer's own money.
• What happens to your funds if the issuer fails? Ask where you stand and what that answer is based on.
• Who holds the coin between the sale and your payout? Ask in whose name it is held.
• Who takes the loss if the coin trades below a dollar before you convert? Ask for the name of the party that carries it, in addition to any written policy.

Get the answers in writing

Settle this in writing rather than on a sales call. Ask your payments provider to write down the coin, the issuer, the regulator, the redemption path, the custodian and who carries the loss if the coin slips or the issuer fails. If a provider won't put those answers in writing, treat that as a reason to wait.

ISOs and agents can use the same list as a script: before you tell a merchant yes, get the written answers from the settlement partner and hand them over. That protects the merchant, and it protects your book if a coin runs into trouble after you have boarded them.

A sensible first step is to pick the stablecoin your customers ask about most and send these eight questions to your payments provider this week. Ask for written answers, and wait until you have them before you turn on acceptance.