US FDIC Proposes to Clarify that Stablecoin Holders Are Not Covered by Deposit Insurance

Odaily Planet Daily News: The U.S. Federal Deposit Insurance Corporation's (FDIC) public comment period for its proposed rule regarding stablecoin issuers ended on June 9. The proposal aims to clarify that the payment stablecoin itself does not constitute an insured deposit. While the reserve assets held as corporate deposits by the stablecoin issuer may be insured, stablecoin holders themselves are not entitled to pass-through FDIC insurance coverage.

In the feedback received, standard-setting organizations called for a common reporting framework to support interoperability. Community banks advocated prohibiting stablecoin providers from attracting users through interest payments, cashback, or similar incentives, arguing that such practices would divert deposits from banks and reduce local lending resources. The proposal also requires issuers to maintain highly liquid reserve assets, limit exposure to any single financial institution to no more than 40% of reserve assets, and establish custody controls and asset segregation requirements. (pymnts)