CryptoSlate
A hypothetical Fed-supervised stablecoin issuer with $1 billion in circulation and no revenue beyond reserve assets would face a $20 million baseline operational-risk capital charge under the proposal announced Sept. 24. That amount excludes any loss-history adjustment or other applicable capital charges, and it is separate from the reserves required to back the coins.
Why it matters
The proposed issuance charge is marginal: 2% on the first $20 billion of payment stablecoins outstanding, 1.5% on the next $30 billion, and 1% above $50 billion. The baseline would also include 25% of the issuer’s three-year average annual revenue from non-reserve assets. At $10 billion outstanding and no such revenue, the issuance portion would be $200 million.
The rules would cover approved stablecoin-issuing subsidiaries of insured state member banks and certain qualifying state-chartered issuers that transition to Fed supervision under the GENIUS Act. The $10 billion threshold applies only to that transition category, not to stablecoin issuers generally.
Market impact
The Fed would separately require eligible reserve assets worth at least the par value of outstanding coins. It also proposes a 2% capital charge on reserve assets that are uninsured deposit claims or undercollateralized reverse repurchase agreements. These are distinct from the operational-risk charge.
The OCC’s pending proposal takes a different path for issuers under its jurisdiction: an initial capital amount tailored to the business and risks, generally subject to a $5 million floor during a de novo period, plus liquid assets equal to 12 months of expenses. The Fed and OCC proposals remain subject to rulemaking, and the Fed’s loss adjustment and final requirements are still to be settled.
Frequently asked questions
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How much baseline capital would the Fed proposal assign to a $1B issuer?
A hypothetical issuer with $1 billion in circulation and no revenue beyond reserve assets would face a $20 million baseline operational-risk capital charge. Loss adjustments and other applicable charges would be additional.
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What issuance rates does the Fed propose for larger stablecoin issuers?
The proposed marginal rates are 2% on the first $20 billion outstanding, 1.5% on the next $30 billion, and 1% on amounts above $50 billion.
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Are stablecoin reserves included in the proposed operational-risk capital charge?
No. Eligible reserves worth at least the par value of outstanding coins are a separate requirement. The proposal also describes a distinct 2% capital charge for certain reserve assets.
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Which issuers would fall within the Fed proposal’s supervisory scope?
The framework would cover approved stablecoin-issuing subsidiaries of insured state member banks and certain qualifying state-chartered issuers transitioning to Fed supervision under the GENIUS Act.
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How does the OCC proposal differ from the Fed’s approach?
The OCC proposes issuer-specific capital based on business plans and risks, generally subject to a $5 million floor during a de novo period, plus liquid assets equal to 12 months of expenses.
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