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No Deposit Insurance For GENIUS Act Stablecoins, FDIC Chief Reiterates

The FDIC is proposing a rule change to clarify that stablecoin holders will not be eligible for deposit insurance.
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Mar 11, 2026 • 1 min read

In a speech before the American Bankers Association's Washington Summit, FDIC Chair Travis Hill outlined a proposed rule change that will clarify deposit insurance is not available to stablecoin holders.

What's the Scoop?

  • Pass-Through Loophole: The Federal Deposit Insurance Corporation (FDIC) is updating its rules to comply with the GENIUS Act. According to Chair Hill, the banking regulator is working to eliminate a potential "pass-through" deposit insurance loophole for stablecoin users, in which financial firms could possibly obtain federal deposit insurance by depositing stablecoins to banks on behalf of customers.
  • No Deposit Interest: The GENIUS Act clearly outlines that payment stablecoins are not “subject to deposit insurance” or guaranteed by the U.S. government. The FDIC's proposed rule change seeks to close any potential loophole that could violate this Act.

What's the Take?

Stablecoins have never needed deposit insurance to succeed. GENIUS Act-compliant payment stablecoins must be reserved at least 1:1 by extremely high quality collateral, implying an infinitely lower of probability of losses than fractional reserve bank deposits.

Remarks by FDIC Chairman Travis Hill: An Update on Reforms to the Regulatory Toolkit | FDIC.gov
Remarks by FDIC Chairman Travis Hill Regarding Reforms to the Regulatory Toolkit
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