The chair of the Federal Deposit Insurance Corporation (FDIC) has clarified that under the proposed GENIUS Act, stablecoins would not receive deposit insurance coverage. The plan explicitly prohibits "pass-through insurance" for stablecoins held by third parties, reinforcing that these digital assets would remain uninsured by the FDIC. This move highlights regulatory caution around stablecoins, reflecting concerns about their risk profile and the potential impact on the traditional banking system.
This announcement comes as the GENIUS Act aims to establish clearer guidelines for digital currencies but stops short of extending federal deposit protections to stablecoin holders. By excluding stablecoins from deposit insurance, the FDIC is signaling a distinction between conventional bank deposits and digital assets, emphasizing that users should not expect the same level of security for stablecoin holdings under this legislation.