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Home/Markets & Investing/CRYPTO IRS RULING · CRYPTO MONEY LAUNDERING ENFORCEMENT

FDIC Rules Out Pass-Through Insurance for Stablecoin Holders

AP

Amara Pendleton

crypto IRS ruling · Apr 14, 2026

FDIC Rules Out Pass-Through Insurance for Stablecoin Holders

Source: DojiDoji Data Terminal

Stablecoin holders will not receive FDIC deposit insurance, even if the reserves backing their tokens are held at insured banks. The FDIC Board of Directors approved a notice of proposed rulemaking on April 7, 2026, to implement the GENIUS Act, which creates a federal framework for stablecoins.

Related Brief1h ago
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Stablecoin transaction volumes could reach $1.5 quadrillion as regulatory frameworks finalize by 2026

Banks can now use stablecoins for cross-border payments, interbank liquidity, and FX efficiency as global regulations in the US, UK, and EU enable the integration of stablecoins into mainstream financial infrastructure. This shift is driven by the regulatory framework being established this year. The FDIC has approved proposed rulemaking to implement the GENIUS Act for payment stablecoin issuers. Simultaneously, FinCEN and OFAC have jointly proposed new AML and sanctions compliance requirements for stablecoin transactions. These rules require real-time identification of counterparties and the the ability to block prohibited transactions before settlement. Verified counterparty identity and pre-authorization are now prerequisites for funds to reach the blockchain. Adjusted stablecoin transaction volume is projected to reach $719 trillion by 2035 through organic growth alone. This figure is projected to increase as a $100 trillion wealth transfer from Boomers to Millennials and Gen Z between 2028 and 2048 accelerates adoption. Stablecoin transaction volumes could approach $1.5 quadrillion by 2035. Stablecoin payment volumes are on pace to match Visa and Mastercard‱s off-chain transaction volumes between 2031 and 2039.

The proposal explicitly states that reserves backing payment stablecoins would not be insured to stablecoin holders on a pass-through basis. This mechanism, common in traditional finance, would have extended coverage to the end user through an intermediary. The FDIC views the token issuance layer as a disqualifying extra step.

Related Brief6h ago
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Circle’s refusal to freeze $230 million in exploit funds reveals its legalist approach to asset control

Approximately $230 million in USDC linked to a $280 million exploit of Drift Protocol was bridged from Solana to Ethereum through Circle’s infrastructure without being frozen. On-chain investigator ZachXBT criticized the issuer for failing to act on the funds. Circle CEO Jeremy Allaire stated that the company freezes wallets only when directed by law enforcement or court orders. The exploit involved social engineering techniques and is potentially tied to North Korean actors. Allaire stated that unilateral action by private firms in such cases would raise ethical and legal concerns.

To compensate for the lack of insurance, the rule requires stablecoin reserves to be treated as customer property and segregated from the bank's own assets. Custodial banks must publish monthly audit-verified reports of these reserves to ensure they are not lumped in with the bank's balance sheet. If a stablecoin issuer fails, holders will have a priority claim on a pool of fully reserved, audited, and segregated assets.

Related Brief8h ago
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New Clarity Act draft prohibits stablecoin yield payments

Circle stock fell 20% after the release of a new draft of the the Clarity Act. The legislation's latest version prohibits stablecoin yield payments.

Banks can begin submitting applications to issue stablecoins as early as July 2026. Final implementing regulations are expected in late 2026.

Related Brief13h ago
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US Institutional Demand Drives $1.1 Billion Crypto Inflow

US investors drove $1.06 billion in inflows into crypto investment products last week, accounting for 95% of the global total. This surge was driven by regulated Bitcoin and Ethereum ETFs and favorable domestic economic signals. Total weekly inflows reached $1.1 billion, the largest since early January 2026. Total assets under management rebounded to levels last seen in early February. Bitcoin dominated the activity, capturing $871 million in inflows. Ethereum followed with $196.5 million. Short-Bitcoin investment products recorded $20.2 million in inflows, the highest weekly figure since November 2024.

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