US FDIC Proposes to Clarify That Stablecoin Holders Are Not Entitled to Deposit Insurance Coverage

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

In the request for comment, standardization organizations called for a common reporting framework to support interoperability. Community banks advocated prohibiting stablecoin providers from attracting users through methods such as interest payments or cash rebates, arguing that this would divert bank deposits and reduce local lending resources. The proposal also requires issuers to maintain highly liquid reserve assets, ensuring exposure to any single financial institution does not exceed 40% of the reserve assets, and to establish custodial controls and asset segregation requirements. (pymnts)