Stablecoins won't get any kind of deposit insurance under GENIUS rules, says FDIC chief
The FDIC Chairman stated that stablecoins will not be eligible for deposit insurance, even through pass-through arrangements, under the GENIUS Act.Summary
Federal Deposit Insurance Corp. (FDIC) Chairman Travis Hill announced that stablecoins will not receive government deposit insurance, including “pass-through insurance” offered by third-party firms, when the GENIUS Act is fully implemented. The GENIUS Act explicitly prohibits FDIC insurance for stablecoins like USDC and USDT, distinguishing them from traditional bank deposits which are insured up to $250,000. Hill clarified that while the Act didn't directly address pass-through insurance, prohibiting it aligns with the law's intent, citing difficulties in identifying end-customers in large stablecoin arrangements. Despite the lack of FDIC insurance, stablecoins are mandated to be fully reserved by their issuers. The decision addresses concerns from banks that offering yield on stablecoins could draw deposits away from traditional banking, potentially impacting profits. The FDIC is also considering how to regulate tokenized deposits, suggesting they should receive the same treatment as traditional deposits.
(Source：CoinDesk)