U.S. Federal Deposit Insurance Corp Chair Travis Hill said stablecoin deposits will not be guaranteed, Cointelegraph reported on Tuesday.
It means the FDIC would not have the authority to protect stablecoin deposits even if the GENIUS Act, passed in July last year, takes effect.
In prepared remarks for the American Bankers Association Washington Summit, Hill said, "Once the GENIUS bill is fully implemented, the government will not guarantee stablecoin deposits," and stressed that "stablecoin issuers also cannot claim that digital assets are covered by FDIC insurance." The FDIC also plans to block 'pass-through insurance' through third parties.
Hill said, "If stablecoins could receive pass-through insurance, then if the bank holding issuer reserves fails, the FDIC would have to insure deposit accounts based on the interests of stablecoin holders," adding that "this would undermine the existing $250,000 limit that applies to corporate deposit accounts."
Chi-gyu Hwang
delight@d-today.co.kr