FDIC to Deny Deposit Insurance for Stablecoins Under GENIUS Act, Tightens Pass-Through Rules

FDIC Chair Travis Hill told reporters the agency will propose a rule clarifying that stablecoin holders will not qualify for federal deposit insurance under the GENIUS Act, reiterating that the agency does not intend to extend insurance coverage to payment stablecoins ^[2][4][1].

The proposed rule would explicitly prohibit pass-through insurance arrangements from third parties and make clear that many current stablecoin custody arrangements do not meet pass-through insurance requirements; the GENIUS Act itself requires stablecoin issuers to hold full reserves and separates regulated stablecoins from bank deposits insured up to $250,000 ^[2][3].

Industry reporting notes banks have raised concerns that broader stablecoin adoption could spark depositor migration, and the FDIC’s stance—excluding stablecoins from insurance—is presented as a response to those 'deposit flight' fears ^[1][4].

The FDIC said it will proceed with formal rulemaking to implement the GENIUS Act restrictions on insurance for stablecoins, according to the agency’s public remarks ^[2].