The U.S. Federal Reserve has moved forward with its role in implementing the GENIUS Act, proposing two regulatory frameworks covering stablecoin issuance and rewards programs.

The proposals released Thursday are part of a broader effort by federal agencies to establish oversight requirements for stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins Act.

The rules will be subject to 60-day public comment periods. If finalized, they would create regulatory safeguards for stablecoin activities and establish a pathway for banks supervised by the Fed to issue their own stablecoins.

The GENIUS Act set July 2026 as the deadline for U.S. banking regulators and the Treasury Department to establish the necessary regulations. That deadline has passed, although agencies have made substantial progress toward completing the framework.

The Fed’s proposal on stablecoin rewards follows a similar approach to the one outlined by the Office of the Comptroller of the Currency. Both regulators are addressing the law’s restrictions on stablecoin issuers paying interest or yield to token holders.

Under the Fed’s proposal, certain third-party arrangements would be presumed to constitute prohibited interest or yield payments. The central bank said its interpretation is consistent with the OCC’s proposed framework.

While the rules remain subject to change, the proposals appear to leave limited room for crypto companies to offer stablecoin incentives resembling traditional credit-card rewards.

Stablecoin rewards were a notable issue in discussions surrounding the Digital Asset Market Clarity Act. The legislation raised questions over the types and amounts of incentives companies such as Coinbase could provide to stablecoin users. Those proposed changes did not advance, leaving the GENIUS Act as the primary federal law governing stablecoin rewards.

The Fed will consider feedback submitted during the public-comment period before making any changes and publishing final regulations. The process typically takes several months but can extend longer for complex rules.

Proposed Reserve Standards and Bank Issuance Rules

One of the Fed’s proposals focuses on capital and reserve requirements. The rules are intended to ensure stablecoins are backed by highly liquid assets and that issuers maintain sufficient financial strength to withstand market stress.

The same proposal also outlines stablecoin-related activities permitted for banks supervised by the Federal Reserve and includes the rules governing rewards.

The second proposal establishes the application process for regulated banks seeking permission to issue stablecoins. Applicants would need to provide a business plan, financial information, relevant policies and procedures, and other supporting documentation.

Fed Governor Michael Barr said stablecoins need to be redeemable at par quickly and reliably across different market environments. He highlighted the importance of this requirement during periods of market stress, when the value of even liquid government debt can come under pressure or when an issuer and its affiliates face financial strain.

The Treasury Department advanced another part of the GENIUS Act implementation process last month by proposing definitions for U.S. stablecoin issuance and specifying which entities would fall under the law.

The Federal Deposit Insurance Corp. began developing its portion of the framework in December. In June, multiple federal agencies also proposed customer-identification requirements that would require stablecoin issuers to follow procedures similar to those used by other regulated financial institutions.