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

Odaily Planet Daily News The comment period for the US Federal Deposit Insurance Corporation's (FDIC) proposed rule concerning stablecoin issuers ended on June 9. The proposal aims to clarify that the payment stablecoin itself is not an insured deposit. While the reserve assets held as corporate deposits of the stablecoin issuer would be insured, stablecoin holders would not be 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 for prohibiting stablecoin providers from attracting users through interest, cashback, and similar incentives, arguing that this would divert bank deposits 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 custodial controls and asset segregation requirements. (pymnts)