BPI, TCH, CBA Comment on FDIC GENIUS Act Stablecoin and Tokenized Deposit Rule

Ladies and Gentlemen:

The Bank Policy Institute,^[1] The Clearing House Association L.L.C.,^[2] and the Consumer Bankers Association^[3] submit this letter in response to the notice of proposed rulemaking ("NPR") issued by the Federal Deposit Insurance Corporation ("FDIC") regarding GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions.^[4] We appreciate the FDIC's careful consideration of the numerous significant policy questions that the GENIUS Act raises and their impact on the regulations that it and other federal and state agencies must issue to implement the statute. In particular, we appreciate the FDIC's inclusion of proposed amendments to its regulations confirming the FDIC's technology-neutral approach to identifying deposits and determining their insurability. Indeed, this comment focuses solely on those aspects of the proposal related to "tokenized deposits."4F^[5]

As U.S. insured depository institutions^[6] ("IDIs") evaluate the use of blockchain or other distributed ledger technology to establish new means of representing or recording deposits, the insured status of those funds is a critical consideration for institutions in considering whether to pursue the development of such products.^[7] While we believe the Federal Deposit Insurance Act ("FDIA") is clear that the status of an obligation as a "deposit" does not depend on the technology used to represent or record that obligation, and therefore does not affect those funds' eligibility for deposit insurance, we welcome the FDIC's proposal to codify that conclusion in its regulations.

In addition, the FDIC proposes a related change to its regulations to clarify that the FDIC's recordkeeping requirements are also technology neutral such that institutions may use different technologies, "including blockchain and distributed ledger infrastructures, for purposes of recording deposit liabilities," to meet the FDIC's recordkeeping requirements related to deposit insurance determinations.^[8]

We believe the FDIA is clear that IDIs may offer innovative deposit products, such as tokenized deposits, that may afford customers various benefits, while retaining all the benefits and protections of deposit insurance. However, for the reasons detailed below, we welcome the FDIC's proposed amendments that would confirm this technology-neutral approach to defining "deposits" and the related recordkeeping requirements related to determining deposit insurance coverage.^[9]

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] The Clearing House Association L.L.C., the country's oldest banking trade association, is a nonpartisan organization that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company L.L.C., owns and operates core payments system infrastructure in the United States, clearing and settling more than $2 trillion every business day.

[3] The CBA is a member-driven trade association, and the only national financial trade group focused exclusively on retail banking-banking services geared toward consumers and small businesses. As the recognized voice on retail banking issues, CBA provides leadership, education, research, and federal representation for its members. CBA members operate in all 50 states. They include the nation's largest bank holding companies as well as regional and super-community banks. The overwhelming majority of CBA's members are financial institutions holding more than $10 billion in assets.

[4] FDIC, GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions, Notice of Proposed Rulemaking, 91 Fed. Reg. 18534 (April 10, 2026).

[5] BPI and CBA are submitting a separate comment responding to the other issues covered in the proposal. We use the term "tokenized deposit" in this comment letter consistent with the FDIC's articulation of the meaning of that term in the NPR. The FDIC states in the preamble that the term "tokenized deposit" "generally refers to a tokenized form of an IDI's deposit liability recorded in an on-chain or off-chain account enabled with distributed ledger technology. 'Deposit tokens' are similar in application to tokenized deposits. Generally, a deposit token is more digitally native without a credit in a corresponding account. The terms 'tokenized deposit' and 'deposit token' are sometimes used interchangeably when discussing deposit tokenization. For purposes of this proposal, 'tokenized deposit' is intended as a general term to also include 'deposit token.'" 91 Fed. Reg. at 18534, note 3.

[6] See 12 U.S.C. § 1813(c)(2) (defining an IDI as any bank or savings association the deposits of which are insured by the FDIC pursuant to the FDIA).

[7] We appreciate that the FDIC has taken this important step to provide clarity on the insured status of deposits represented using distributed ledger technology. Other regulatory considerations related to offering deposits represented by blockchain or other new technology are also relevant as banks evaluate innovative product offerings. For example, IDIs likely would need to consider the potential effects of the product on compliance with standardized liquidity risk management standards (i.e., the liquidity coverage ratio and net stable funding ratio rules), if applicable. As another example, IDIs likely would need to consider potential illicit finance-related risks and the compliance with anti-money laundering/countering the financing of terrorism and economic sanctions requirements and expectations. IDIs also may need to consider consumer protection requirements, especially if the product would be available for personal, family or household purposes. We urge the FDIC to engage with the other banking regulators, the Treasury Department, including FinCEN and OFAC, and other relevant agencies, to facilitate a coordinated approach to articulating the requirements and expectations regarding the use of new technologies to represent deposits.

[8] 91 Fed. Reg. at 18560.

[9] We note that as IDIs continue to explore and develop tokenized deposits and other new products, additional guidance from the FDIC may be useful regarding the topics addressed herein.