FDIC Chair to Bar Pass-Through Insurance for Payment Stablecoins
The Federal Deposit Insurance Corporation, under direction from its chair, is preparing a rulemaking to block payment stablecoins from receiving pass-through deposit insurance. Regulators say the step is intended to clarify a growing distinction between tokenized bank deposits—actual bank-held deposits represented on-chain—and crypto-native payment stablecoins that rely on market mechanisms and intermediaries. The proposal is expected to enter a public comment period once published.
If finalized, the rule would narrow a path some issuers had explored to offer so-called insured stablecoin products, likely prompting changes to custody arrangements and funding models. Market participants warn the move could reduce confidence in uninsured stablecoins, raise costs, and push activity toward alternative structures or jurisdictions. The proposal marks a notable escalation in U.S. supervisory efforts to frame stablecoin types differently for consumer protection and systemic risk purposes.