The U.S. Federal Deposit Insurance Corp. (FDIC) has clarified that stablecoin holders will not be eligible for pass-through deposit insurance under the new GENIUS Act, according to Chairman Travis Hill. This regulatory development comes as stablecoin adoption and usage continue to surge, with the total market capitalization reaching a record $314 billion alongside $7.2 trillion in adjusted transaction volume.
The stablecoin market has reached a new all-time high capitalization of $314 billion with $97 billion in daily trading volume. This growth reflects a shift from individual transactions toward institutional and central bank transfers.
Regulatory clarity arrived as the U.S. Congress passed the GENIUS Act. The law now establishes rules for stablecoin use and prohibits issuers from claiming their assets are backed by U.S. government faith.
In a recent speech, FDIC Chairman Travis Hill outlined major proposed rules from his agency. He stated that payment stablecoins subject to the GENIUS Act are not eligible for pass-through insurance, meaning users receive no government guarantee on their funds.
“The FDIC intends to propose that payment stablecoins subject to the Genius Act are not eligible for pass-through insurance,” Hill said. He argued this treatment is consistent with the Act’s framework and its prohibition on implying government backing.
Hill further explained his agency’s position by stating, “Treating stablecoin holders as the insured depositors, even on a pass-through basis, seems inconsistent with the GENIUS Act.” Estimating which stablecoin arrangements would qualify for such insurance is also described as difficult.
Despite this regulatory hurdle, on-chain data shows stablecoin usage continues to grow robustly. Adjusted Transaction Volume has risen to $7.2 trillion, accompanied by 1.9 billion individual transactions.
The number of addresses interacting with stablecoins has also surged, reaching 48.7 million. This indicates strong, organic demand for these digital assets as a means of payment across market participants.
