WASHINGTON— Stablecoin users will not receive any form of federal deposit insurance under the new U.S. stablecoin framework, with Federal Deposit Insurance Corp. Chairman Travis Hill saying the FDIC plans to make clear that payment stablecoins also will be barred from so-called pass-through insurance, according to reporting by CoinDesk.
Speaking at the American Bankers Association’s Washington summit, Hill said the FDIC is preparing a proposal stating that payment stablecoins governed by the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act will not qualify for pass-through insurance, CoinDesk reported.
“The FDIC is planning to propose that payment stablecoins subject to the GENIUS Act are not eligible for pass-through insurance,” Hill said.
CoinDesk noted the GENIUS Act already bars FDIC insurance for stablecoins themselves, reinforcing a key distinction between payment stablecoins and traditional bank deposits, which are insured up to $250,000. Hill said the statute does not explicitly address pass-through insurance, but he indicated the FDIC believes excluding it is consistent with the law’s intent.
“It is difficult to estimate the extent to which stablecoin arrangements would qualify for pass-through insurance if they were eligible,” Hill said, noting that current pass-through rules require end-customer identities and interests to be readily ascertainable—a feature he said is uncommon in large stablecoin arrangements today.