The Federal Deposit Insurance Corporation (FDIC) is moving to provide regulatory clarity for blockchain-based finance. Speaking at a fintech conference on Thursday, Acting FDIC Chair Travis Hill confirmed the agency is considering formal FDIC guidance for the insurance of tokenized deposits. He also revealed plans to launch a formal stablecoin application process by the end of 2025, a key step in implementing the new GENIUS Act. This two-pronged approach signals a major move by one of America's top banking regulators to bring both bank-issued and privately-issued digital dollars firmly within the federal regulatory perimeter.

• Discover the simple, powerful philosophy from a top regulator that could finally unlock institutional adoption of on-chain finance.
• Learn about the two-pronged plan to create a clear, regulated path for both bank-issued tokenized deposits and private stablecoins.
• Find out what this new "application process" for stablecoin issuers will entail and how it will be governed.

The most powerful element of the announcement was the simple philosophy articulated by Travis Hill. "My view for a long time has been that a deposit is a deposit," he stated, adding that moving a deposit "from a traditional-finance world to a blockchain... shouldn’t change the legal nature of it." This statement is a potential bombshell for the financial industry. By cutting through the technological complexity to focus on the underlying legal claim, Hill is signaling that tokenized deposits—digital representations of money held in a bank—should be eligible for the same FDIC deposit insurance as any other traditional account.

This FDIC guidance, if formalized, would be the final green light for Wall Street's largest institutions, which have been developing tokenized deposits but have been hesitant about their ultimate legal and insurance status. This move provides the regulatory and consumer-protection framework necessary for these assets to be used at scale. It effectively de-risks the model that JPMorgan is already actively deploying with its JPM Coin deposit token, which allows institutional clients to conduct 24/7 settlement on-chain. With federal deposit insurance clarifying the picture, the path for more banks to follow suit is now clear.

Hill's announcement detailed a clear, two-part strategy for integrating digital dollars into the U.S. banking system. The first prong, the FDIC guidance for tokenized deposits, is aimed squarely at existing, chartered banks. It allows them to innovate on-chain, using their own regulated balance sheets as the foundation for new, programmable payment rails.

The second prong is the launch of a formal stablecoin application process by the end of 2025. This is aimed at non-bank financial technology firms—the companies that issue today's dominant stablecoins. This application process is a direct fulfillment of the FDIC's new responsibilities under the GENIUS Act, the landmark legislation passed in July to create a federal framework for stablecoin issuers.

According to Travis Hill, FDIC staff are already working on the specific standards for this new regime, which will include defined rules for capital requirements, reserve composition and management, and operational risk. This is the moment the U.S. stablecoin industry has been waiting for: a clear, formal path to becoming a regulated financial entity, moving them out of a legal gray area and into a supervised system.

This regulatory push is not happening in a vacuum. It is a direct response to the explosive, undeniable growth of the tokenization and stablecoin markets. The market for tokenized real-world assets (excluding stablecoins) surpassed $24 billion in the first half of the year, with major players like BlackRock launching their own tokenized money market funds. The stablecoin market itself now has a total capitalization of over $305 billion.

This massive scale has forced regulators and traditional institutions to engage. This FDIC guidance and the forthcoming stablecoin application process are the legal and regulatory infrastructure being built to support this new economy. It provides a U.S.-based, regulated pathway for the kind of massive institutional collaboration seen in the Circle Arc testnet, which brings together over 100 financial giants to test shared blockchain settlement. This new U.S. framework provides a domestic answer for those global players.

The pro-innovation stance from a key regulator like Travis Hill is also a significant political signal. It aligns with the current administration's broader goal of ending the "war on crypto" and fostering innovation on U.S. soil. This policy-driven approach, creating a clear GENIUS Act-compliant path for companies to follow, stands in contrast to the more symbolic political acts like the recent pardon of Binance founder Changpeng Zhao. The pardon may have closed a chapter on the old "enforcement-first" era, but it is this new FDIC guidance that is actively writing the rulebook for the next chapter of American finance.

FAQs

What are tokenized deposits?
Tokenized deposits are digital representations of the money you hold in a traditional, FDIC-insured bank. They are a direct liability of the bank, but they exist on a blockchain, allowing them to be used for instant, 24/7 payments and in smart contracts.

How are tokenized deposits different from stablecoins?
Tokenized deposits are issued by a chartered bank and represent a direct claim on the bank's deposits (which are eligible for deposit insurance). A stablecoin is issued by a private, non-bank company and is backed by a pool of assets (like cash and U.S. Treasurys) that the company holds in reserve.

What is the new FDIC guidance?
The FDIC is considering issuing formal FDIC guidance that would clarify that tokenized deposits issued by an insured bank are still "deposits" and are therefore protected by the FDIC's deposit insurance, just like regular money in a checking or savings account.

What is the stablecoin application process?
As part of its duties under the GENIUS Act, the FDIC is creating a formal application process for non-bank stablecoin issuers. This will allow them to apply to become regulated entities, subject to federal standards for capital, reserves, and risk management.

Who is Travis Hill?
Travis Hill is the Acting Chair of the FDIC (Federal Deposit Insurance Corporation), one of the primary U.S. regulators responsible for overseeing banks and protecting depositors.