FDIC Chairman: Stablecoins are not entitled to any form of deposit insurance under the GENIUS Act.
PANews reported on March 12th, citing CoinDesk, that Travis Hill, Chairman of the Federal Deposit Insurance Corporation (FDIC), stated that under the GENIUS Act, stablecoin holders will not be eligible for any form of deposit insurance, including "transferred insurance" obtained by financial institutions on behalf of their clients. He pointed out that the GENIUS Act explicitly distinguishes stablecoins from bank deposits, which are guaranteed by the U.S. government up to $250,000. Hill explained that current transferred insurance rules require the ability to identify the end customer and their interests in day-to-day operations, a feature currently lacking in large stablecoin arrangements. Although stablecoins cannot obtain FDIC insurance, the law stipulates that they must maintain full reserves, protected by the issuer's own safeguards.
Hill also stated that the FDIC is considering the issue of tokenized deposits, which are not covered by the GENIUS Act, and believes that regardless of the technology or record-keeping method used, tokenized deposits should be legally considered deposits and enjoy the same regulatory and deposit insurance treatment as non-tokenized deposits.
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