FDIC Proposes Stablecoin Rules to Mitigate Systemic Risks Amid Global Regulatory Race

The Federal Deposit Insurance Corp. (FDIC) is set to publish the first rules under the GENIUS Act by December 2025, marking a pivotal step in the U.S. regulatory framework for stablecoin issuers. Acting FDIC Chairman Travis Hill confirmed the agency will propose prudential requirements for payment stablecoins by early 2026, with a focus on clarifying supervision and risk controls for tokenized deposits. This move aligns with broader global efforts to address the growing influence of stablecoins, which have seen increased adoption in high-inflation economies and experimental programs like New York's $12,000 stablecoin-based universal basic income pilot.

The FDIC's initiative follows a surge in stablecoin usage, particularly in developing markets where dollar-backed tokens like USDC have gained traction as a hedge against fiat inflation according to market analysis. However, recent market data reveals a $2 billion decline in stablecoin market capitalization in November 2025, driven by regulatory scrutiny and waning investor confidence amid reduced looping strategies on platforms like Ethena. The drop highlights vulnerabilities in the sector, with USDT's dominance rising by nearly 0.50% while Ethena's USDe fell 26.8% over the same period.

Global regulators are racing to close gaps in stablecoin governance. Turkmenistan, for instance, approved a sweeping crypto law in November 2025, imposing strict licensing, AML measures, and cold storage requirements for exchanges, while explicitly categorizing stablecoins as non-legal tender. Meanwhile, the U.K. is advancing its own regulatory approach, with tax reforms deferring capital gains taxes for decentralized finance users and the Bank of England's Deputy Governor Sarah Breeden signaling alignment with U.S. oversight strategies.

The FDIC's proposed rules aim to address systemic risks, including liquidity and redemption mechanisms for backed stablecoins, while ensuring compliance with existing financial safeguards. Hill emphasized the agency's commitment to a "clear rulemaking timeline," with guidance on tokenized deposits expected to clarify how digital representations of fiat assets will be supervised according to the agency's statement. This aligns with recommendations from the President's Working Group on Financial Markets, which has underscored the need for robust risk controls in tokenized financial systems.

Market participants remain cautious. The New York pilot, funded by Coinbase and administered by GiveDirectly, distributes USDC to low-income residents, illustrating both the potential and challenges of stablecoin integration into traditional financial systems. While recipients have multiple options for managing their funds, the program's success hinges on public trust in stablecoin stability-a trust eroded by recent market volatility and regulatory uncertainty.

As the FDIC moves forward, its actions will likely shape the trajectory of stablecoin innovation in the U.S. and beyond. With global regulators increasingly prioritizing oversight, the sector's evolution will depend on balancing innovation with safeguards to protect both investors and the broader financial system.