The acting chair of the Federal Deposit Insurance Corporation (FDIC), the U.S. agency that oversees and insures banks, is reportedly weighing new guidance on tokenized deposit insurance and preparing to introduce an application framework for stablecoins by the end of the year.
Acting FDIC Chair Travis Hill—who has previously expressed optimism about asset tokenization—told attendees at the Federal Reserve Bank of Philadelphia’s Fintech Conference on Thursday that the agency intends to release guidance on tokenized deposit insurance, according to reports.
The FDIC protects depositors when insured banks fail, guaranteeing funds held in insured accounts. Hill emphasized that tokenization should not alter the fundamental nature of insured deposits.
“My view for a long time has been that a deposit is a deposit. Moving a deposit from a traditional-finance world to a blockchain or distributed-ledger world shouldn’t change the legal nature of it,” Hill said, as quoted by Bloomberg.
Growing Interest in Tokenization
Regulators and major financial institutions have shown rising interest in the real-world asset (RWA) tokenization market this year.
Excluding stablecoins, the value of tokenized RWAs surpassed $24 billion in the first half of the year, driven largely by private credit and U.S. Treasurys, according to data from RedStone. BlackRock, the world’s largest asset manager, has become a major participant, launching its BUIDL tokenized money market fund in 2024.
Stablecoin Application Framework Expected by Year-End
Hill also revealed that the FDIC is developing a regulatory regime for stablecoin issuance and expects to release a proposal for an application process by the end of 2025, as part of its mandate under the GENIUS Act, according to Law360.
He noted that it is too early to predict how many institutions will seek approval, but FDIC staff are actively working on standards related to capital, reserves, and risk management for FDIC-supervised stablecoin issuers.
Stablecoins continue to see rapid growth as banks worldwide experiment with the technology. As of Friday, their combined market capitalization sits at roughly $305 billion, according to DefiLlama.
