The Fed moved to tighten stablecoin regulation by passing two new proposals under the GENIUS Act.

What's this about?

The Federal Reserve has proposed two rules to help regulate stablecoin issuers under the Guiding and Establishing National Innovation for US stablecoins (GENIUS Act).

A stablecoin is a digital asset that's designed to have relatively constant value, often referring to a currency such as the U.S. dollar. The Fed regulates its issuance so it directly affects who owns, uses or exchanges the stablecoins because rules dictate who can issue them, how they should be backed up and what happens when there are problems.

Why are the new rules important?

The heart of the rule is the credibility of Stablecoin's value. Federal Reserve Governor Michael Barr noted that a stablecoin will only be stable when users can quickly redeem it back to its full value, even during volatile markets or when issuers and associated companies experience financial stress.

He supported the bill, saying: "I support this bill as one of the right steps under the GENIUS Act specifically because it identifies key issues that would benefit from public input. I welcome provisions on hedge-fund restrictions including transparent and standardized capital requirements".

So this proposal is not just about the technicalities of a financial institution, but it's also a condition that allows holders to know whether stablecoins have real collateral, what are their risk management standards and if there are problems with the system, how will they be audited.

What about the Fed's two rules?

The first rule focuses on issuers of stablecoins for settlement under the Fed's direction, requiring such digital assets to be backed by fully collateralized securities according to an approved listing: short-term U.S. government bonds (Treasury bills) and other qualified high quality assets.

In addition, the rule establishes capital requirements for credit and operational risks, along with increased risk management standards for activities related to stablecoins. The Fed also proposes a requirement for companies holding assets that use stablecoin securities, and specifies what actions banks under its direction can take.US

The second rule focuses on requests from federally regulated banks that want to issue stablecoins for use in payments. These banks must submit business plans, financial data and other documents for consideration; the proposal also covers appeals and litigation for those requests.

Impact on users in Thailand and the crypto market

Although the rule is aimed at overseeing U.S. systems, it affects stablecoin markets worldwide because dollar-denominated stablecoins are a commonly used asset in the crypto industry; Thai users who buy, sell or transact through digital platforms may be influenced informally by standards of issuers, custodians and participating banks that issue stablecoins.

From the user's perspective, clearer oversight regulation could make redemption, asset backing checks and risk management processes more systematic while potentially introducing greater identity verification or financial compliance steps in line with practices that regulators have proposed since June.

For users who hold stablecoins in or convert to the Thai rupee, changes in US regulations may affect expectations for issuers that provide cross-border services but do not mean all platforms in Thailand will change their terms immediately. Users buying, selling or storing stablecoins through a platform such as Bitkub or providers under the direction of the SEC (Thailand) Thailand should follow the announcement of the platform and relevant regulatory bodies.

Next steps and what to look for.

The GENIUS Act, passed by Congress in 20092025 and signed into law by President Donald Trump on July 18,[3] provides a framework for the U.S. federal government's stablecoin oversight.

Last month, the US Treasury Department proposed a key definition of who can issue U.S. stablecoins and which entities are subject to regulation, while the Federal Deposit Insurance Corporation (FDIC) began its regulatory process in December, and several agencies have proposed mandating that stablecoin issuers verify and identify users under existing monetary regulations since June.

For this Fed proposal, the public comment period closes 60 days after publication in the Federal Register. The issues to watch out for are reserve limits, transparent and standardized capital requirements, as well as questions of whether the rules will adequately manage interest rate risk and foreign exchange risk.