The Federal Reserve has published two proposals aimed at putting more detailed guardrails around stablecoin issuers as the U.S. implements the GENIUS Act. The plan, developed for entities under Fed supervision, would add capital requirements, define operational-risk charges, tighten redemption expectations, and mandate standardized reserve reporting—while also outlining an approval path for certain banks to issue payment stablecoins through subsidiaries.

At the same time, Fed Governor Michael Barr signaled support for the overall direction but emphasized that stablecoins must remain reliably redeemable at par even under market stress. His remarks point to the central test investors and users will apply to the final rules: will redemption work smoothly when liquidity tightens and even high-quality government debt trades under strain?

Key takeaways

• The Fed’s proposal adds an operational-risk capital framework for Fed-supervised stablecoin issuers, with charges that vary based on the amount of stablecoins outstanding.
• Redemptions would generally need to be processed within two business days, and issuers would face defined steps if reserves fall below the one-to-one backing requirement.
• Issuers would be required to publish monthly reserve and outstanding stablecoin disclosures, certified by senior executives and audited by a registered public accounting firm.
• A separate proposal would set an application process for Fed-supervised banks to seek approval to issue payment stablecoins through subsidiaries.
• Barr backed the direction of the framework but urged additional clarity on how stability is ensured during stress, including interest-rate and foreign-currency risks.

How the GENIUS Act shapes the Fed’s stablecoin rulemaking

The GENIUS Act already contains baseline requirements for stablecoin issuers: tokens must be backed by reserves on a one-to-one basis, and issuers are limited in the types of assets they can hold. In particular, the statute restricts reserves to certain categories including cash, bank deposits, and short-term U.S. Treasurys, while leaving regulators to build out more granular capital, diversification, and risk-management standards.

According to the Fed’s proposal, the missing piece is the operational and supervisory detail: how much capital issuers must hold against specific risks, what redemption timelines must be met, and how often issuers must document and verify that reserves remain adequate.

Capital charges, redemption timelines, and what happens if backing slips

Under the Fed proposal, issuers would face an operational-risk capital charge calculated as a percentage of the stablecoins they have issued. The rate would step down as outstanding amounts increase: 2% for the first $20 billion of stablecoins outstanding, 1.5% for the next $30 billion, and 1% for amounts above $50 billion. The proposal also references additional capital requirements tied to credit and operational risks.

The rules would also establish a practical expectation for redemption operations. In general, Fed-supervised issuers would be expected to process redemptions within two business days.

Importantly, the proposal addresses a key failure scenario: if an issuer’s reserves fall below the required one-to-one backing, it would have to notify the Fed and choose between two paths—either restore reserves according to a remediation plan or liquidate reserves and redeem outstanding stablecoins.

For investors and market participants, this structure matters because it translates a statutory “always backed” principle into an operational consequence framework. Instead of only requiring reserve sufficiency after the fact, the proposal attempts to specify how quickly an issuer must act and what supervisory information will be available.

Monthly transparency with audited reporting

To reinforce the reserve-backstopping requirement, the Fed proposal would require issuers to publish monthly reports. These disclosures would cover the outstanding amount of stablecoins and the value and composition of reserves.

The proposal also sets a higher standard for accountability around that data: the disclosures would need to be examined by a registered public accounting firm and certified by the issuer’s CEO and CFO.

That combination—frequent reporting, third-party review, and executive certification—can be significant for traders, partners, and users trying to assess whether a stablecoin remains compliant as market conditions evolve. It also increases the importance of internal controls at issuers, since executive sign-off implies direct responsibility for the quality and accuracy of reserve information.

Separate track for Fed-supervised banks issuing through subsidiaries

Alongside issuer-focused requirements, the Fed released a separate proposal that would establish an application process for Fed-supervised banks seeking approval to issue payment stablecoins through subsidiaries.

Per the proposal, banks would need to submit a business plan and provide financial information as part of the approval process. While the GENIUS Act sets the statutory groundwork, this track would determine whether banks—under Fed supervision—can bring certain stablecoin issuance activities under a subsidiary structure and how they would be evaluated before launch.

For the broader industry, the distinction matters: approval frameworks can affect timing, product design, and risk management choices for banks looking to participate in stablecoin markets.

Barr stresses redemption reliability under stress and highlights open questions

In remarks accompanying the proposals, Fed Governor Michael Barr supported the overall direction but argued that more work is needed before stablecoins can qualify as reliable payment instruments. In a statement released Thursday, Barr said stablecoins will only be stable if they can be “reliably and promptly redeemed at par in a range of conditions,” explicitly including periods of market stress.

Barr’s commentary focused on scenarios where liquidity strains can affect even otherwise liquid government debt, as well as episodes where an issuer—or related entities—faces pressure. He said he was encouraged by the proposed limits on reserve assets and the standardized capital requirements, but he also called for public feedback on whether the framework adequately addresses interest-rate and foreign-currency risks.

Barr also raised process-and-enforcement considerations. He said universal redemption rights should be clearly established in the final rule. He further expressed concern about a proposed standard that would limit the Fed’s ability to take supervisory or enforcement action over an anti-money laundering deficiency unless the issue is deemed “significant or systemic.”

These points suggest that while the Fed is moving to operationalize the GENIUS Act, the “stress test” details—particularly around interest-rate, FX, redemption rights, and supervisory triggers—may still evolve through the comment period.

What happens next

The Fed’s proposals are open for public comment for 60 days after publication in the Federal Register. With the GENIUS Act scheduled to take effect on Jan. 18, 2027, or 120 days after final implementing rules are issued—whichever comes first—the key question for market participants is how the final rule will address Barr’s concerns and refine redemption reliability, capital adequacy, and stress-related risks.

Paxos Labs has launched PAXGy, a token built on PAX Gold that is designed to increase the amount of PAXG a holder can redeem as its reserves earn returns from gold leasing.

According to Paxos Labs’ launch announcement shared with crypto.news, the company deploys the reserves behind PAXGy to vetted institutional gold borrowers. As the borrowers pay to lease the metal, the company says the value of each PAXGy rises in PAXG terms. Holders can redeem PAXGy for PAXG, although the amount returned depends on the exchange rate at the time.

The structure gives holders a way to seek returns measured in ounces of gold rather than dollars. It also makes PAXGy different from simply holding PAXG: the return depends on the performance of a lending strategy, while the dollar value of both tokens remains exposed to changes in the gold price, Paxos Labs said.

How PAXGy turns gold leasing into token returns

Paxos Labs said a holder can enter the product by depositing PAXG or swapping an accepted stablecoin. Instead of distributing additional tokens to the wallet, income from the reserve assets is designed to increase the amount of PAXG redeemable for each PAXGy.

The reserves are placed with institutional borrowers in the bullion leasing market, according to the announcement. Refiners, jewelry makers, miners and bullion banks may borrow gold for their operations and pay a lease rate in gold terms. Paxos Labs said the market has long relied on large transactions and direct relationships with banks, limiting access for smaller holders.

“Gold has been lent for thousands of years, and institutions have earned on their bullion reserves for decades,” Paxos Labs co-founder Bhau Kotecha said in the announcement. He said PAXGy is intended to give token holders access to those economics, with the reserves growing in ounce terms when the strategy earns a return.

The distinction between the two tokens matters for anyone entering or leaving the product. Under Paxos’ PAXG terms, each PAXG represents one fine troy ounce of London Good Delivery gold held on a segregated basis for holders. PAXGy, by contrast, is built on PAXG and uses reserves in an external lending strategy, as described by Paxos Labs.

For direct redemptions through the Paxos platform, the PAXG terms require a verified account. They also set a minimum of 430 PAXG, plus a fee, for redemption into an allocated London Good Delivery bar. Those conditions concern the underlying PAXG product; Paxos Labs describes the exit from PAXGy as redemption into PAXG.

Where PAXGy is available at launch

Paxos Labs named OKX as PAXGy’s only centralized exchange listing at launch and said the token is available through OKX Gold Earn and X Layer. It also named 0x, Uniswap and Ether.Fi among its onchain launch partners. Additional venues are expected to follow, the company said.

For transfers between blockchains, Paxos Labs selected Chainlink’s Cross-Chain Interoperability Protocol as its exclusive messaging provider. The company said holders can move a PAXGy position across supported chains without first redeeming it for PAXG. Availability through a particular exchange or service may still depend on that provider’s terms and the holder’s location.

The launch comes as tokenized gold is being used for more than spot trading. In August, Arch Lending began accepting PAXG and Tether Gold as collateral for loans, according to an earlier crypto.news report. Arch’s service lets eligible holders borrow against their tokens; PAXGy instead seeks a return by placing reserve assets with gold borrowers.

Trading activity has also increased. A report on tokenized gold volume in May cited CoinGecko data showing $90.7 billion in first-quarter 2026 spot volume, above the $84.64 billion recorded throughout 2025. CoinGecko identified PAXG and Tether Gold as the main contributors to that market’s trading activity.

What U.S. holders need to know about the risks

Paxos Labs’ product notice says PAXGy carries credit, liquidity, and market risks. Returns are not guaranteed: losses in the external strategies or a borrower default could cause the PAXGy-to-PAXG exchange rate to fall, leaving a holder with less gold exposure than the amount deposited. A rise in the exchange rate would likewise not guarantee a dollar profit if the price of gold fell.

For U.S. holders considering the underlying asset, Paxos’ PAXG terms spell out a separate set of redemption conditions. Only verified customers can purchase PAXG from Paxos or convert and redeem it directly through its platform, and the company says it may refuse a transaction in circumstances described in those terms. PAXGy’s launch announcement does not state that holding the new token changes those direct PAXG redemption requirements.

Paxos Labs said tokenizing gold allows smaller holdings to be pooled into positions large enough for institutional leasing. Chief executive and co-founder Charles Cascarilla described PAXGy as a way to put tokenized gold to work after it has been made transferable onchain. The company’s notice says any resulting growth still depends on the reserve strategy, and its exchange rate may be adjusted downward if that strategy incurs losses.

The Federal Reserve has proposed capital, redemption and other regulatory requirements for stablecoin issuers under its supervision as it moves to implement the GENIUS Act.

The GENIUS Act already requires stablecoin issuers to maintain reserves backing their tokens on a one-to-one basis and limits the types of assets they can hold, including cash, bank deposits and short-term US Treasurys. The law left federal regulators to establish more detailed capital, reserve-diversification and risk-management requirements.

Under the Fed proposal, issuers would face an operational-risk capital charge equal to 2% of the first $20 billion in stablecoins outstanding, 1.5% of the next $30 billion and 1% of amounts above $50 billion, along with additional capital requirements tied to credit and operational risks.

Issuers would generally be required to process redemptions within two business days. If reserves fall below the required one-to-one backing, an issuer would have to notify the Fed and either restore its reserves under a remediation plan or liquidate them and redeem outstanding stablecoins.

Issuers would also have to publish monthly reports detailing their outstanding stablecoins and the value and composition of their reserves. The disclosures would have to be examined by a registered public accounting firm and certified by the issuer’s CEO and CFO.

A separate proposal would establish an application process for Fed-supervised banks seeking approval to issue payment stablecoins through subsidiaries, including requirements to submit a business plan and financial information.

The proposals are open for public comment for 60 days after publication in the Federal Register.

Related: EU banking watchdog calls for crypto lending rules under MiCA

Barr says stablecoins must remain redeemable during market stress

Fed Governor Michael Barr supported the proposal on Thursday but said further work would be required for stablecoins to become reliable payment instruments.

“Stablecoins will only be stable if they can be reliably and promptly redeemed at par in a range of conditions. This includes during market stress, when pressure can be put on the value of even otherwise liquid government debt, and during episodes of strain on the individual issuer or its related entities,” Barr said.

Barr added that he was encouraged by the proposed limits on reserve assets and standardized capital requirements, while calling for public feedback on whether the framework adequately addresses interest-rate and foreign-currency risks.

He also said universal redemption rights should be clearly established in the final rule and raised concerns about a standard that would prevent the Fed from taking supervisory or enforcement action over an anti-money laundering deficiency unless the issue is considered “significant or systemic.”

The GENIUS Act is set to take effect on Jan. 18, 2027, or 120 days after federal regulators issue final implementing rules, whichever comes first.

Magazine: Winners and losers of the SEC’s new tokenized stocks rules

“Under the proposal, certain types of arrangements involving third parties would be presumed to be prohibited payments of interest or yield,” the Fed wrote, noting that its approach is consistent with the OCC’s. Though the regulations aren’t final, the agencies seem to be allowing a very narrow approach by crypto platforms to offer stablecoin rewards akin to credit-card incentive programs.

The question of how much companies such as Coinbase could reward stablecoin users was one of the sticking points in the debate over the recently failed Digital Asset Market Clarity Act. As it stands, the GENIUS Act is now the primary law governing stablecoin rewards, because the efforts to revise it in the Clarity Act didn’t succeed.

Proposed rules like those offered by the Fed on Thursday need to gather input from the public before the federal regulator can revise them and publish them in final form — a process that usually takes several months, sometimes much longer.

The central bank’s first proposal on Thursday governs capital and reserve requirements meant to ensure that the stablecoins are fully represented by the most liquid assets and the issuers have a solid foundation in times of stress. It also outlines accepted stablecoin activities at its supervised banks, and it’s the proposal that includes the stablecoin rewards component.

Cardano’s ADA rose toward $0.26 as the Cardano Foundation and Fireblocks announced plans to add full support for tokens issued on the network by March 2027.

Fireblocks plans to add Cardano token support by March 2027

The Cardano Foundation and Fireblocks said on Sep. 24 that Cardano Native Tokens, or CNTs, will become standard assets on the Fireblocks platform. Banks, exchanges, payment companies and fintechs using the platform will be able to custody, send and receive the tokens under its existing security and policy controls.

Fireblocks has supported Cardano’s native coin, ADA, since 2021. The planned addition covers other assets issued on Cardano, including tokens that use the Cardano Token Registry standard, known as CIP-26, and the network’s onchain metadata standard, CIP-68. According to the announcement, handling those tokens has required extra manual steps until now.

The companies expect support to become available by March 2027. They also plan to assess further integrations with Cardano’s decentralized finance ecosystem during 2027.

Cardano Foundation CEO Frederik Gregaard said access through infrastructure institutions already used could help issuers of stablecoins and tokenized assets on Cardano reach those firms.

“Institutions rarely adopt a new asset on its own. Adoption happens through trusted infrastructure.”

The announcement concerns planned access to Cardano-based tokens. It does not report new token issuance, institutional purchases of ADA or a completed platform rollout.

ADA price faces another test near $0.26

TradingView’s ADA/USDT daily chart showed ADA near $0.247 late on Sep. 24, up about 3.65% for the day. Price had reached roughly $0.251 before pulling back, leaving the recent high around $0.26 as the next level to watch.

A Fibonacci retracement drawn from the chart’s June low near $0.138 to the recent high near $0.262 places the 78.6% level at $0.2359. ADA was trading above that level at the time of the chart. A move through the recent high would put $0.262 back in focus, while a drop below $0.236 would take price beneath the retracement level.

The daily relative strength index stood near 64, above its average of about 56. The moving average convergence divergence indicator was also positive, with its MACD line above the signal line. Both readings reflected the recent advance, though ADA had yet to clear the high used in the retracement.

On the 4-hour chart, ADA had retreated from a move above $0.26 before recovering to around $0.247. The Supertrend indicator remained below price near $0.2354. A rising trendline on the chart pointed toward the $0.25 area, making a sustained move above that level relevant to another test of the recent peak.

Liquidation levels cluster on both sides of ADA

CoinGlass’s 24-hour ADA liquidation heatmap showed a bright band near $0.252, just above the price at the end of the chart. Other visible bands sat around $0.242 and $0.236, with a larger group of levels lower down near $0.23.

Those bands show where leveraged positions could face liquidation if price reaches them; they do not establish where ADA will trade next. The nearby $0.252 band also falls below the recent high around $0.26, so ADA would need to pass both areas to confirm a stronger breakout on the displayed charts.

The Fireblocks rollout gives Cardano token issuers a timetable for access to institutional custody and transfer tools, including firms serving the US market. For ADA holders, the nearer test remains technical: whether price can regain $0.25 and break above $0.26 while holding the $0.235–$0.236 support area on a pullback.

Crypto exchange Bitget had $351.6 million dollars exposed to a system breach on Thursday, CEO Gracy Chen announced in a social media post.

In a post on X, Chen said that Bitget’s cold wallets and user funds were safe, and that there were “unauthorized transfers from some of our hot wallets.” The exchange maintains a “user protection fund” that had over $464 million in it, she said.

“Cold wallets remain fully secure. Bitget operates a three-tier wallet architecture — the breach contained only a portion of the hot wallet and warm wallet layers,” she added.

Deposits and trading remain online, she said, but the exchange is “temporarily” pausing withdrawals until it can finish a security review.

Onchain data and independent blockchain researchers had earlier flagged unusual wallet movements, initially reporting that around $183 million in digital assets had moved from wallets labeled as belonging to the exchange.

Emmett Gallic, an analyst at blockchain analytics firm Arkham Intelligence, said in an X post that the transactions involved three Bitget hot wallets and one cold wallet across multiple blockchains, with the funds consolidated into a single address. The assets included ETH, BNB, AVAX and USDT0, according to his analysis.