US crypto policy took a decisive turn in the final days of September. Roughly two weeks after the Senate failed to advance the CLARITY Act, falling short of the 60 votes needed to proceed, federal agencies kept building the rules on their own. The Federal Reserve released new stablecoin proposals, and SEC Commissioner Hester Peirce announced her departure.
Fed Puts Detail Behind the GENIUS Act
On September 24, the Federal Reserve Board asked for public comment on two proposals to implement the GENIUS Act for payment stablecoin issuers under its supervision. The board approved publication of both by unanimous vote.
The first proposal would require issuers to back their tokens fully with permitted reserve assets, such as short-term Treasury bills and other high-quality liquid assets. It also sets standardized capital requirements for credit and operational risks, along with risk management standards and rules for firms that safekeep the reserves.
A Clearer Path for Banks
The second proposal creates a dedicated application process for Fed-supervised banks that want to issue payment stablecoins through a subsidiary. Applicants would submit a business plan and financial information, and the process includes procedures for appeals and hearings.
Fed Governor Michael Barr welcomed the proposed reserve limits and capital standards. He also asked the public to weigh in on interest-rate and foreign-currency risks, and stressed that clear redemption rights are essential for public confidence. These are proposals, not final rules. A 60-day comment period begins once they are published in the Federal Register.
Hester Peirce Sets Her Exit
Peirce, widely known as "Crypto Mom," will leave the SEC on October 2 after nearly nine years on the commission. She announced the move in a resignation letter posted on September 25 and will join Regent University School of Law as an associate professor in November.
Peirce led the SEC's Crypto Task Force and pushed for years for clear rules on digital assets. Her recent work includes the proposed Regulation Crypto Assets and a five-year Innovation Exemption for on-chain trading of tokenized stocks, approved on September 17.
A Smaller SEC and Unfinished Business
Her exit leaves only two sitting commissioners, Chairman Paul Atkins and Commissioner Mark Uyeda, and no successor has been announced. Any replacement will need a presidential nomination and Senate confirmation. Peirce leaves just as several of the agency's crypto proposals move from draft to final rules.
What to Watch Next
With comprehensive market structure legislation stalled, the SEC, CFTC and Fed are carrying US crypto regulation forward through rulemaking. Market participants should watch the Fed comment period, the fate of the SEC's pending proposals, and who is chosen to fill Peirce's seat.
