Chairman of the U.S. FDIC: Stablecoins under the GENIUS Act shall not be entitled to any form of deposit insurance

Techub News reports, according to CoinDesk, Travis Hill, Chairman of the Federal Deposit Insurance Corporation (FDIC), stated that under the rules of the GENIUS Act, stablecoin holders will not be eligible for any form of deposit insurance, including "pass-through insurance" obtained by financial institutions on behalf of customers. He pointed out that the GENIUS Act explicitly distinguishes stablecoins from bank deposits, the latter being backed by a U.S. government guarantee of up to $250,000. Hill explained that current pass-through insurance rules require the ability to identify the ultimate customer's identity and interest in day-to-day operations, a feature currently lacking in large stablecoin arrangements. Although stablecoins cannot obtain FDIC insurance, the law requires them to be fully reserved, protected by the issuer's own safeguards. Hill also mentioned that the FDIC is considering the issue of tokenized deposits not addressed by the GENIUS Act, believing that regardless of the technology or record-keeping method used, tokenized deposits should legally be treated as deposits and receive the same regulatory and deposit insurance treatment as non-tokenized deposits.