buildersoff Files Comment Letter on the FDIC’s GENIUS Act Stablecoin Rulemaking

Today, buildersoff filed a comment letter with the FDIC in response to the agency’s proposed rule for stablecoin issuers under the GENIUS Act. We support much of the proposed framework, including 1:1 reserve backing, monthly public reporting, and the authorization to offer custody and exchange. But we submitted a comment letter that addresses several areas where the proposal, as drafted, would impose unnecessary burdens on early-stage issuers, generate legal uncertainty that undermines the Act’s pro-competitive objectives, and fragment the stablecoin regulatory landscape:

1. Nothing in the GENIUS Act permits the FDIC to either prohibit third parties from paying yield or to create a rebuttable presumption that such payments violate the Act. On the contrary, the legislative record confirms Congress expressly rejected the very proposals that the FDIC now advances. The FDIC should withdraw these impermissible expansions of the Act or, at minimum, incorporate the same limits proposed by the OCC and NCUA and design an enforcement cure period that protects good-faith issuers from agency overreach.
2. The proposal requires issuers running multiple stablecoin brands to construct and maintain separate reserve pools, custodial accounts, internal controls, and supervisory infrastructure for each brand. This is unnecessarily duplicative and will increase fixed costs for early-stage issuers they cannot readily absorb. The FDIC should instead permit issuers to satisfy any per-brand identification requirement through subledgering. Doing so will align the FDIC’s rule with the OCC’s approach, ensuring both agencies are in compliance with the GENIUS Act’s interagency coordination directive.
3. The FDIC should recognize tokenized forms of eligible reserve assets. The OCC has already proposed to recognize such assets as acceptable, as required by the text of the GENIUS Act. The FDIC should follow suit.
4. The FDIC should reduce its proposed weekly supervisory reporting requirement to a monthly cadence and codify the reporting categories in the rule text itself. It is always better to have regular oversight requirements laid out in the rule itself rather than guidance that can be changed in the wink of a regulator’s eye without public notice and comment.
5. The FDIC should clarify the appropriate resolution authority for issuers organized as national trust banks. As drafted, neither the FDIC’s proposal nor the GENIUS Act make clear how a trust bank would be resolved if it failed, a gap that persists even on a close reading of both texts. Until this is clear, institutional counterparties and foreign regulators cannot answer basic questions about which insolvency regime governs a given issuer’s failure. The days and hours surrounding a wind-down of a trust are among the most fraught moments any financial entity will face. It is imperative that these moments of crisis not be exacerbated by lawyers and executives having to debate what the law requires them to do.

You can read buildersoff’s full comment letter here.