"In my view, we should answer this question definitively by regulation, rather than waiting until a bank that holds stablecoin reserves fails, when different parties may have different expectations on the availability of FDIC insurance."
"It seems hard to rationalize the GENIUS Act's firm prohibition on marketing stablecoins as subject to deposit insurance if stablecoins were intended to serve as an access mechanism for FDIC-insured deposit accounts."
"The proposal would also bar stablecoin issuers from advertising that the digital currencies pegged to fiat assets, such as the US dollar, are covered by pass-through deposit insurance."
The Federal Deposit Insurance Corp. is drafting a regulatory proposal to explicitly exclude payment stablecoins from pass-through deposit insurance protections. FDIC Chairman Travis Hill announced this initiative at the American Bankers Association, stating the agency will clarify that stablecoins pegged to fiat assets like the US dollar do not qualify for FDIC coverage. The proposal also prohibits stablecoin issuers from advertising that their digital currencies are covered by deposit insurance. Hill emphasized the need for definitive regulation to prevent confusion and conflicting expectations if a bank holding stablecoin reserves fails. The GENIUS Act, signed by President Trump, already prohibited stablecoin operators from marketing their products as subject to deposit insurance, though it did not explicitly address pass-through insurance eligibility.
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