The Federal Reserve has proposed two rules to implement the GENIUS Act framework for payment stablecoin issuers under its supervision, opening both proposals to 60-day public comment periods. The first would establish reserve, capital, liquidity, risk-management, disclosure and permitted-activity requirements, including rules addressing whether third-party arrangements amount to prohibited interest or yield payments. The second would create an approval process for insured state member banks seeking to issue payment stablecoins through subsidiaries. The proposals would require one-to-one reserve backing, generally require redemptions within two business days, and mandate monthly reserve disclosures examined by a registered public accounting firm and certified by the issuer's CEO and CFO. Operational-risk capital charges would equal 2% of the first $20 billion in stablecoins outstanding, 1.5% of the next $30 billion and 1% above $50 billion, with additional charges for credit and operational risks. The Fed's approach is consistent with a parallel proposal from the Office of the Comptroller of the Currency that addresses the GENIUS Act's ban on interest or yield for stablecoin holders. The rules appear to leave only a narrow path for crypto platforms to offer rewards resembling credit-card incentives. The issue was a point of contention in the recently failed Digital Asset Market Clarity Act, making the GENIUS Act the primary law governing stablecoin rewards. Federal agencies were required to put implementing regulations in place by July 2026 and are now past that deadline. The GENIUS Act is set to take effect on Jan. 18, 2027, or 120 days after final implementing rules are issued, whichever comes first.