Key developments in digital assets on Monday included a Federal Deposit Insurance Corp. proposal outlining how banks could issue payment stablecoins under the GENIUS Act, new consultations from the United Kingdom’s Financial Conduct Authority on crypto market rules, and industry calls at a U.S. Securities and Exchange Commission roundtable to reconsider the treatment of blockchain privacy tools.
US banks could issue payment stablecoins under FDIC proposal for GENIUS Act
The Federal Deposit Insurance Corp. released a 38-page proposal detailing a process for FDIC-supervised institutions to seek approval, through subsidiaries, to issue payment stablecoins as part of implementing the GENIUS Act’s stablecoin provisions. According to Bloomberg, the draft will undergo a public comment period before advancing to the next stage of rulemaking.
Under the plan, banks would apply for approval to issue payment stablecoins via a subsidiary. The FDIC would evaluate both the subsidiary and the parent bank against criteria set out in the GENIUS Act, including adherence to stablecoin issuance standards, the institution’s financial condition, management quality, redemption policies, and broader safety and soundness considerations. If approved, the FDIC would act as the primary federal supervisor for the subsidiary’s payment stablecoin operations.
The FDIC, which insures bank deposits and oversees member institutions, has in recent years taken a more active role in defining how banks engage with digital assets, including revisiting the role of reputational risk in supervision.
UK regulator opens consultations on crypto exchange, lending and DeFi rules
The UK Financial Conduct Authority launched consultations on proposed rules for digital asset markets, representing the next phase of building a comprehensive regulatory framework for crypto assets. The proposals, issued across three consultation papers, cover trading platforms, intermediaries, staking, lending and borrowing, market abuse, disclosures, and decentralized finance. The FCA said it will accept responses until Feb. 12, 2026.
The regulator said the proposals are intended to support innovation while ensuring consumers understand the risks of crypto investments. It added that regulation should not eliminate risk entirely but should ensure market participants act responsibly and transparently. “Our goal is to have a regime that protects consumers, supports innovation and promotes trust,” said David Geale, the FCA’s executive director for payments and digital finance, adding that industry input will inform the final rules.
The consultations advance the UK’s push toward a full “market structure” regime for crypto, moving beyond earlier measures focused on financial promotions and Anti-Money Laundering compliance.
Industry urges SEC to reassess stance on privacy tools
Executives from the crypto sector urged the Securities and Exchange Commission to reconsider its approach to blockchain privacy tools at the agency’s sixth crypto-focused roundtable on Monday, arguing there are legitimate uses beyond illicit activity. StarkWare general counsel Katherine Kirkpatrick Bos, who participated in a panel discussion, said a key takeaway was that developers and users of privacy tools should not be presumed to be primarily bad actors. She questioned why individuals should have to prove they are compliant or using tools for lawful purposes by default.
Katherine Kirkpatrick Bos (left) discussing financial privacy at an SEC roundtable on Monday. Source: Paul Brigner
In opening remarks, SEC chair Paul Atkins cautioned that, if “pushed in the wrong direction, crypto could become the most powerful financial surveillance architecture ever invented,” with the government turning it “into a financial panopticon.” He said the agency must balance oversight and privacy and “make certain that Americans can use these [privacy] tools without immediately falling under suspicion.”
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