FDIC Explores Tokenized Deposit Insurance and Stablecoin Framework

FDIC's Interest in Tokenization

The Federal Deposit Insurance Corporation (FDIC) is reportedly exploring guidance for tokenized deposit insurance and is set to introduce a stablecoin application process by the year's end. Acting FDIC Chair Travis Hill, known for his positive stance on tokenization, discussed these developments at the Federal Reserve Bank of Philadelphia’s Fintech Conference. The FDIC, which insures bank deposits, aims to release guidelines to adapt traditional deposit insurance to blockchain environments.

Growing Focus on Real-World Asset Tokenization

The financial sector, including regulators and Wall Street, has shown heightened interest in real-world asset (RWA) tokenization. This year, the value of tokenized RWAs has surpassed $24 billion, driven by private credit and US Treasurys, according to RedStone. BlackRock, a major asset manager, launched the BUIDL tokenized money market fund in 2024.

Stablecoin Regulation on the Horizon

Hill announced that the FDIC is developing a stablecoin issuance framework, with a proposal expected by late 2025 under the GENIUS Act. While it's uncertain how many institutions will participate, the FDIC is working on standards for capital, reserve requirements, and risk management for stablecoin issuers. The stablecoin market remains robust, with a capitalization of approximately $305 billion, as reported by DefiLlama.