FDIC to Propose Barring Payment Stablecoins From Passthrough Deposit Insurance

The Federal Deposit Insurance Corporation plans to introduce rules explicitly excluding payment stablecoins from passthrough insurance eligibility, FDIC Chairman Travis Hill said on March 11 at the American Bankers Association Washington Summit. Hill said the agency's interpretation of the GENIUS Act means stablecoin holders should not be treated as insured depositors on a passthrough basis, even when issuers hold reserves at FDIC-insured banks, while tokenized deposits meeting the statutory definition of a "deposit" would continue to receive standard insurance coverage. Under current rules, denying passthrough status would limit stablecoin reserves to $250,000 in insurance as a single corporate account, rather than extending up to $250,000 per individual holder, and Hill noted that existing requirements to identify end customers are "not a common feature of large stablecoin arrangements today." The FDIC expects to request public comment on the proposal in the coming months.