The Fed proposes rules that make stablecoins almost as safe as a bank

Stablecoins are getting an upgrade from 2027. Last Thursday the Fed proposed rules that make them almost as safe as money in a bank, which answers the one question that's kept most businesses away.

What a stablecoin will have to do

• Keep a real dollar, or something just as safe, behind every coin
• Pay you back within two business days, whenever you ask
• If the dollars behind the coins ever run short, as happened to USDC in 2023 when part of its backing was stuck in a failed bank, the issuer has to fill the gap or sell everything and give every holder their share
• No interest just for holding it, so it can't work like a savings account without a bank's rules

What that means

• Only licensed issuers can sell stablecoins in the US, so the list of coins you can trust gets shorter and clearer
• Banks the Fed supervises can apply to issue their own, so the stablecoin you use in a few years may come from a bank

Swift spent this week making the old road faster, and the Fed spent it making the new one safe enough to use. For the US this is part of a bigger plan: stablecoins are backed by US dollars and US government debt, so every one sold abroad spreads the dollar further, in digital form.