The FDIC approved the very first proposal that sets the rules for how banks file applications to issue payment stablecoins under Trump’s GENIUS Act.
The proposal spells out how insured institutions form subsidiaries to issue stablecoins and how state nonmember banks and state savings associations must file if they want to enter this market, with the agency adding that it will take comments for 60 days once the proposal hits the Federal Register.
The proposal also explains how the FDIC must receive and review filings, how section 5 of the GENIUS Act guides the evaluation process, and how applications get processed within set time windows. It also lays out a clear appeal system for banks that receive a denial.
FDIC sets new application process under GENIUS Act
The rule addresses everything from the statutory factors the FDIC must use when reviewing applications to the time limits for responding.
Banks that plan to issue payment stablecoins must operate through subsidiaries, and those subsidiaries need to be approved before issuing a single token.
The FDIC ended its notice by saying that it is leaving the door open for public comments.
While the regulators sort out stablecoin rules, Wall Street is rolling out new crypto-linked products. Jefferies issued the first U.S. structured note tied to BlackRock’s Bitcoin ETF, and after that, banks like Goldman Sachs, Morgan Stanley, and JPMorgan joined in, pushing out more than $530 million in notes linked to the iShares Bitcoin Trust (IBIT), based on data from Structured Products Intelligence.
Jefferies built a note that doubles IBIT’s gain up to a 90% cap and softens the first 20% drop. If IBIT falls 50%, buyers take a 30% hit instead.
Banks launch crypto-linked structured notes
Marex Group Plc, expanding into the U.S., launched a note tied to two stocks, including miner TeraWulf, after Bitcoin’s drawdown pushed the token about 30% below its high. Marex plans to introduce more IBIT-linked notes.
“I’m convinced that the demand is there,” said Joost Burgerhout, who pointed to growing interest from bigger investors. “We’re seeing more and more institutional validation of Bitcoin as an asset class.”
IBIT’s liquidity sits around $67 billion, making it easy for issuers to price these notes. Ether joins the action too, with Morgan Stanley and JPMorgan offering notes tied to the iShares Ethereum Trust ETF (ETHA).
Not everyone wants in. Gary Garland, who uses structured notes but skips anything tied to crypto, said Bitcoin lacks fundamentals and that these notes “wrap it in complexity.” Gary added that Wall Street “is trying to weaponize Bitcoin’s volatility, using firecrackers and feathers,” calling the market “a horse race that doesn’t even have horses.”
Structured notes tied to Bitcoin sit inside a $200 billion market that mixes fixed income with derivatives. They attract wealthy clients who want risk shaped to specific portfolios.
Aaron Brachman, who advises on structured notes, said Wall Street will always chase new ways to make money off hot themes. “Anytime that there is money to be made on investments, there’s going to be someone creative on a Wall Street bank that’s going to find a way to make money off of it.”
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