BlockBeats News, March 12th, Travis Hill, Chairman of the Federal Deposit Insurance Corporation (FDIC), stated at the American Bankers Association Washington Summit that the FDIC plans to propose a rule clarifying that payment-type stablecoins subject to the GENIUS Act do not qualify for “pass-through insurance,” meaning that third-party financial institutions cannot obtain government deposit protection on behalf of users. This position aligns with the legislative intent of the GENIUS Act, even though the Act does not explicitly prevent such arrangements.
Hill pointed out that the current pass-through insurance rule requires end-user identity and interests to be verifiable in the ordinary course of business, which is not a common feature of large stablecoin arrangements. Despite stablecoins not having FDIC insurance, the GENIUS Act requires them to be fully reserved. Additionally, Hill also stated that the FDIC is considering the positioning of tokenized deposits, suggesting that regardless of the technology or accounting method used, tokenized deposits should be treated as deposits and receive the same regulatory and insurance treatment as non-tokenized deposits.
