At the heart of the debate is “pass-through” insurance — a decades-old mechanism that allows deposits placed at a bank by a third party, such as a fintech or broker-dealer, to be insured as if the end-customers had deposited the money themselves.
“A financial product that satisfies the statutory definition of a ‘deposit’ … remains a deposit regardless of the technology or recordkeeping utilized,” Hill said, affirming that these products should remain eligible for full regulatory and insurance treatment.
The FDIC expects to seek public comment on the proposal in the coming months, offering the industry a chance to argue for a different perspective.
FAQ What did FDIC Chairman Travis Hill announce regarding stablecoins? Hill stated that the FDIC plans to propose rules that would exclude stablecoins from pass-through insurance coverage. What is the difference between tokenized deposits and payment stablecoins? Tokenized deposits may qualify for FDIC insurance, while payment stablecoins face rejection for such protection. How does pass-through insurance affect stablecoin holders? Without pass-through insurance, reserves for stablecoins are treated as a single corporate account, limiting coverage to $250,000 regardless of the fund’s size. What is the FDIC’s next step regarding this proposal? The FDIC will seek public comment on the proposal in the coming months, allowing industry players to share their perspectives.
