US FDIC May Extend $250,000 Insurance Coverage to Stablecoin Deposits

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Certain stablecoins may be listed on the FDIC’s $250,000 end-to-end coverage, as reported to CoinDesk by sources familiar with the situation.

The agency is also exploring the option of direct insurance of deposits with stablecoin issuing banks. Sources said:

“The FDIC is integrating stablecoins into the banking system. If the collateral is a reserve at the Fed, then the argument that it is a deposit might work. If in the form of US government bonds, then such an interpretation will be difficult.”

End-to-end coverage currently applies to fiat deposits of Bitcoin exchange customers, but not stablecoins.

One of the interlocutors has drawn attention to the potential difficulties in providing insurance to token holders due to the need to monitor their operations in open blockchains. Another is that the task of the FDIC is not to expose the deposit insurance fund to unnecessary risks.

Sources did not rule out the agency might seek public comment before a possible change to the policy.

According to media reports, the administration of US President Joe Biden is considering the option of presenting the issuers of stablecoins with the same requirements that apply to banks. They might need to comply with the requirements of a specially developed charter.

In September, it became known about the plans of the US Treasury Department to oblige the issuers of stablecoins to ensure their free conversion into fiat. Earlier, representatives of the department discussed the risks and benefits of stablecoins with representatives of the banking community and credit unions.