The US central bank wrote its rules for digital dollars. Holders may not be paid interest, even through a partner.

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The US Federal Reserve proposed how the stablecoins it oversees must work. Each coin needs at least a dollar behind it, holders get their money back within two business days, and nobody may pay them interest for holding one.

2 days

the longest an issuer may take to hand a holder dollars back

An issuer may promise faster, but not slower, and only a regulator may put limits on payouts. [1]

$317bn

the value of all stablecoins in early 2026

Most of it is in coins tied to the US dollar, the Fed's own analysis says. [1]

the interest a holder may be paid for holding a coin

The ban covers cash, tokens or any other reward, from the issuer or a partner. [1]

The lead story — what happened

The US Federal Reserve, the country's central bank, proposed rules on 24 September for stablecoins issued by companies it oversees. [1]
A stablecoin is a digital token that promises to be worth exactly one US dollar and can be swapped back for one. [1]
The rules carry out the GENIUS Act, a US law passed in July 2025 that set up the first national rulebook for these coins. [1]
An issuer must hold at least one dollar of safe assets, such as cash or short-term US government debt, for every coin it has sold. [1]
It must publish what those reserves are every month, by noon on the last day of the month. [1]
A holder who asks for dollars back must be paid within two business days at the latest. [1]
The issuer may not pay a holder any interest or other reward just for holding the coin, in cash, tokens or anything else. [1]
The Fed says issuers could try to route that payment through another company, so a payment through a partner is presumed to break the ban. [1]
No issuer, whoever oversees it, may make a customer buy a second paid product, or promise not to use a rival, as a condition of getting the coin. [1]
A state-licensed issuer that grows past $10bn in coins must move under a national regulator within 360 days, or stop issuing new ones. [1]
None of the state member banks the Fed oversees issues a stablecoin today, the Fed says, so most of these rules are written for issuers that do not exist yet. [1]

Who is involved

The US Federal Reserve

the US central bank; it oversees some banks and proposed these rules on 24 September
Banks the Fed oversees

state-chartered banks that belong to the Federal Reserve system; the law lets them issue coins through a company they own, with the Fed's approval
Circle

the company behind USDC, a dollar stablecoin; in 2023 about $3.3bn of its reserves were stuck in a bank that failed
The OCC, the FDIC and the NCUA

the other US bank and credit union regulators; each has already proposed its own version of these rules

How it unfolded

March 2023 Circle's USDC slips below one dollar after $3.3bn of its reserves are caught in the failure of Silicon Valley Bank [1]
18 July 2025 The GENIUS Act becomes law in the US [1]
18 Aug 2026 The US Treasury publishes its own rules notice under the law [1]
24 Sep 2026 The Fed proposes its rules, open for comment for 60 days after official publication [1]
By Jan 2027 The law takes effect 18 months after it passed, or 120 days after final rules, whichever comes first [1]

Where this points

The next step is the 60-day comment period, and the question to watch is whether the final rule keeps counting a partner's payment as the issuer's own. [1]

02 Lesson why it matters

Why a ban on paying interest has to name the partners too

If a law stops one company paying you, the company can pay a partner instead, and the partner can pay you, so the rule has to count the partner.

The twist

A ban on one company paying you does little on its own. The payment can go to a partner first, so the rule has to count the partner as the same payer.

The picture

$1A holder hands over

The issuer keeps in reserveat least $1

0Interest paid to the holder, directly or through a partner

Every coin must have at least a dollar behind it, and the holder may not be paid anything for holding it.

How it works

The law bans an issuer paying interest to people who hold its coin
The issuer's reserves sit in things like short-term US government debt
The issuer could pay a partner, such as a company whose brand is on the coin
The partner could then pay the holder, and the ban would be empty
So the Fed counts a payment through a partner as the issuer's own
The issuer has to prove in writing that a deal is not a way round the ban

Where you've seen this

Gifts to public officials

many ethics rules also cover a gift to the official's husband, wife or children, because a gift to the family reaches the official

Limits on political donations

giving money to a friend so the friend can donate it in their own name is banned, because the cap would mean nothing otherwise

Insider trading

a person with a company secret may not pass the tip to a friend who trades on it, because the trade would simply move to the friend

Spending caps in sport

football leagues check sponsorship deals with companies linked to a club's owner, because the owner could pay the club through the sponsor

The catch

A rule can only name the kinds of partner its writers can picture, and the Fed itself expects the deals to be many and to keep changing.

And the whole of it

A person who bought a digital dollar on a trading platform sees the platform and the balance. The issuer, the US government debt behind the coin and any deal between the issuer and its partners are out of sight, and those are what this rule is written about.

03 Truth what's really going on

What is really going on

The US Federal Reserve has written its first draft of how the digital dollars it oversees must work. Its sharpest choice is to treat interest passed to a holder through a partner company as interest paid by the issuer, which the 2025 GENIUS Act bans. [1]

Who gains

People who hold a dollar stablecoin — An issuer under these rules must hold at least a dollar for each coin, publish its reserves every month and pay out within two business days. [1]
Stablecoin issuers — Their reserves may sit in short-term US government debt, which pays interest, and none of it may be passed on to holders for simply holding the coin. [1]
Firms that compete with an issuer's other products — No issuer may make a customer buy a second paid product from it, or promise to avoid a rival, to get the coin. The Fed has proposed no exceptions. [1]

Who pays

Holders who wanted a return on their coins — They may not be paid interest or any reward for holding, from the issuer or, under the proposed presumption, from its partners. [1]
Firms that offer interest on stablecoins as a service — A deal with an issuer that funds such payments would be presumed to break the ban unless the issuer proves otherwise. [1]
Banks that set up an issuing company — They must also hold money of their own against things going wrong: 2% of the coins they have out, for issuers up to $20bn, on top of the full reserves. [1]

What nobody knows yet

Open questions from across today’s stories — ours included.

01

Which companies will actually issue coins under these rules.

The Fed says none of the state member banks it oversees issues a stablecoin today, so the rules are written ahead of any issuer. [1]
02

Which partner deals the interest ban will catch.

The presumption covers a company's affiliates and firms that offer interest on coins as a service, and the Fed itself expects the deals to be many and to keep changing. An issuer can also rebut it in writing. [1]
03

Whether a holder who bought a coin through an app can ask the issuer directly for dollars.

The Fed says many issuers limit direct dealings with ordinary holders, and it has asked whether it should require them to pay any holder who has passed identity checks. [1]
04

How the two-day payout holds up when many holders ask at once.

The Fed has asked whether issuers should get pre-approved access to short-term borrowing in a market panic, which it has not yet decided. [1]
05

When the final rules arrive.

Comments close 60 days after the notice is officially published, and the law takes effect by January 2027 at the latest. No final date has been set. [1]