The U.S. Federal Reserve on Thursday proposed two wide-ranging rules to implement the bulk of its responsibilities under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, joining the group of federal agencies still in the middle of the process to finish the nation's stablecoin regulations.

The proposals would accomplish the central bank's share of the multi-agency work needed to establish oversight of stablecoin issuers under the GENIUS Act, the 2025 law that created the first comprehensive federal framework for payment stablecoins in the United States. Both are now open for 60-day public comment periods, according to the Fed's announcement. Once finalized, they would establish the legal safety net behind the tokens being issued and set up the procedures through which banks regulated by the Fed can issue stablecoins. For issuers and the banks weighing whether to launch their own tokens, the pair of proposals supplies the operational specifics that turn the statute's mandates into requirements they can plan around.

One piece of the package governs the controversial question of stablecoin rewards, and the central bank said it sought to closely match the policies already suggested by the Office of the Comptroller of the Currency (OCC). The move places the Fed alongside the Treasury Department, the Federal Deposit Insurance Corp. and other regulators that have each taken steps to translate the statute into binding rules.

Past the statutory deadline

The GENIUS Act required U.S. banking regulators and the Treasury Department to put implementing regulations in place by July of 2026, meaning the agencies are all well past the legal deadline, though they have made significant progress in recent months.

The Fed's regulatory approach also echoes the OCC's own proposal addressing the law's ban on issuers paying interest or yield for holding stablecoins — an approach CoinDesk previously reported was likely to leave room for certain reward programs.

"Under the proposal, certain types of arrangements involving third parties would be presumed to be prohibited payments of interest or yield," the Fed wrote, noting that its approach is consistent with the OCC's.

Though the regulations aren't final, the agencies appear to be allowing a very narrow approach for crypto platforms to offer stablecoin rewards akin to credit-card incentive programs.

The question of how much companies such as Coinbase could reward stablecoin users was one of the sticking points in the debate over the recently failed Digital Asset Market Clarity Act. As it stands, the GENIUS Act is now the primary law governing stablecoin rewards, because the efforts to revise it in the Clarity Act didn't succeed.

Proposed rules like those offered by the Fed on Thursday need to gather input from the public before the federal regulator can revise them and publish them in final form — a process that usually takes several months, sometimes much longer. Until that happens, the definitive answers on rewards, reserves and bank issuance remain open questions for the market.

Capital, reserves and bank issuance

The central bank's first proposal, set out in regulatory documents, governs capital and reserve requirements meant to ensure that stablecoins are fully represented by the most liquid assets and that issuers have a solid foundation in times of stress. It also outlines the stablecoin activities accepted at the Fed's supervised banks, and it is the proposal that includes the stablecoin rewards component.

The second proposal lays out the procedures under which a regulated bank can begin issuing its own stablecoins, including providing a "business plan; financial information; relevant policies, procedures, and other documents."

"Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions," said Fed Governor Michael Barr, who ran the Fed's supervision program before the administration of President Donald Trump, in a statement. "This includes during market stress, when pressure can be put on the value of even otherwise liquid government debt, and during episodes of strain on the individual issuer or its related entities."

The stress scenarios Barr described are the conditions the first proposal's capital and reserve requirements are meant to guard against.

The wider GENIUS Act rollout

With the Fed's proposals now on the table, the major federal regulators with roles under the law have each moved to draft their share of the rulebook, though none of the measures are final yet.

Last month, the Treasury Department proposed its own part of the implementation process, outlining federal definitions of what it means to issue U.S. stablecoins and who needs to follow the rules set out under the law.

The Federal Deposit Insurance Corp. had started the process December, becoming the first of the many federal entities that needed to set its piece of the law into regulations. In June, multiple agencies proposed requiring stablecoin issuers to approach the identification of their users just like other regulated financial firms.

The Fed's two 60-day comment windows are the nearest checkpoints on the calendar, with the agencies' next steps coming after the public input is weighed and the drafts are revised toward final form.