The Federal Deposit Insurance Corporation is considering guidance for tokenized deposit insurance. The agency also plans to introduce an application process for stablecoins by the end of this year.
Digital assets meet tradfi in London at the fmls25
Stablecoins’ market capitalization reached $193 billion by 1 December last year, with transaction volumes of $27.1 trillion by November, nearly triple the previous year.
Analysts project the sector could reach $3 trillion within five years. Excluding stablecoins, tokenized real-world assets rose over 60% to $13.5 billion, mainly in private credit and U.S. Treasurys.
Regulator Signals Rules for Tokenized Deposits
Acting FDIC Chair Travis Hill said at the Federal Reserve Bank of Philadelphia’s Fintech Conference that guidance on tokenized deposit insurance will eventually be released.
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“My view for a long time has been that a deposit is a deposit. Moving a deposit from a traditional-finance world to a blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term or distributed-ledger world shouldn’t change the legal nature of it,” Hill said, according to Bloomberg.
Regulator Sets Capital, Risk Standards
The FDIC insures deposits at regulated banks. Hill said the agency is developing a framework for stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term issuance under the GENIUS Act. The regulator is working on standards for capital, reserves, and risk management. As of Friday, the stablecoin market capitalization was about $305 billion. In 2024, BlackRock launched a tokenized money market fund called BUIDL.
UK Consultation Targets Systemic Stablecoin Risk
Meanwhile, across the Atlantic, the Bank of England has opened a consultation on regulating sterling-denominated stablecoins. The framework targets tokens widely used for payments that could pose risks to financial stability.
Proposed rules would require issuers to back part of their liabilities with BoE deposits and the remainder with short-term UK government debt. Limits on holdings would apply: £20,000 per coin for individuals and up to £10 million for businesses, with some exemptions. HM Treasury will designate systemically important providers, subject to BoE supervision.
