• A second FDIC rule on prudential requirements will follow early next year.
• The FDIC will supervise bank subsidiaries issuing payment stablecoins.
• Guidance on tokenised deposits is under development.

US regulators are moving quickly to build the country’s new stablecoin supervision system, with federal agencies preparing detailed rulemaking as the GENIUS Act begins to shape policy.

The Federal Deposit Insurance Corporation is set to publish an application framework for payment stablecoin issuers later this month, marking one of the earliest steps in implementing the law signed by President Donald Trump earlier this year.

Alongside the FDIC, the Federal Reserve, and the Treasury Department are working on their own regulatory responsibilities, signalling a coordinated effort to bring stablecoins under a clearer, more structured oversight regime.

FDIC develops licensing framework for stablecoin issuers

The FDIC has confirmed through written testimony scheduled for delivery to the House Financial Services Committee on December 2 that it is close to releasing a proposed rule outlining how payment stablecoin issuers will apply for approval.

The agency began the process earlier this year as part of its duty to implement the GENIUS Act, and the first formal proposal is expected before the end of the month.

Another proposal focusing on prudential requirements for FDIC-supervised issuers is planned for early next year.

Once the application framework is published, the agency will gather public comments before moving toward a final rule, a phase that typically spans several months.

GENIUS Act expands oversight for bank-linked stablecoins

The GENIUS Act introduces a national structure that requires federal and state regulators to coordinate their supervision of stablecoin issuers.

Under the law, the FDIC will oversee and license subsidiaries of insured depository institutions that issue payment stablecoins.

The agency will also set out capital rules, liquidity expectations, and reserve diversification standards.

Much of this work will roll out over the coming year, as several rulemakings are needed to meet the obligations laid out in the legislation.

The FDIC is also consulting recommendations released in July by the President’s Working Group on Digital Asset Markets, which urged regulators to clarify digital asset activities allowed for banks, including asset and liability tokenisation.

Tokenised deposits included in regulatory review

In addition to its stablecoin responsibilities, the FDIC is preparing new guidance aimed at clarifying how tokenised deposits will be treated under federal regulation.

This area has gained attention as banks explore digital versions of traditional deposit products.

The forthcoming guidance is expected to help institutions understand which activities fall within supervisory boundaries and how they will be monitored.

Federal Reserve coordinates its own stablecoin standards

The Federal Reserve will join the FDIC at Tuesday’s House hearing, with Vice Chair for Supervision Michelle Bowman detailing the central bank’s work on stablecoin rules.

The Federal Reserve is coordinating with other banking regulators to craft capital, liquidity, and diversification standards required under the GENIUS Act.

The focus includes creating clarity for banks engaged in digital asset activities and providing regulatory feedback on new use cases as they emerge.

This joint push aims to ensure the banking system can support digital asset development while maintaining stability and compliance.

Other agencies are also advancing their obligations under the GENIUS Act.

The Treasury Department has already completed its public consultations, which concluded in November, and is developing its own rules.

These efforts will run in parallel with the FDIC and Federal Reserve processes, contributing to the broader national framework being built to govern stablecoins across the US.

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• Japan’s 40-year bond yield rose to 3.774% on Thursday.
• Five-year CDS spreads reached 21.73 basis points on 20 November.
• GDP contracted in Q3 2025 and inflation reached 3% in October.

Japan’s new stimulus package is setting off sharp reactions across global markets, with the yen sliding to its weakest point against the US dollar since January 2025 and long-term bond yields rising to record levels.

The cabinet approved a 21.3 trillion yen package on Friday, the largest since the COVID-19 period, and the announcement immediately shifted expectations in currency, bond, and crypto markets.

The scale of the support and the pressure on Japan’s finances are now pushing investors to reconsider how they assess global risk, particularly as liquidity conditions evolve.

Economic reset

The package focuses on easing price pressures, supporting growth, and strengthening defence and diplomatic capacity.

Local government grants and energy subsidies form a key part of the plan, and households are expected to receive around 7,000 yen in benefits over three months.

The government also aims to lift defence spending to 2% of GDP by 2027.

The supplementary budget is expected to pass before the end of the year, although the ruling coalition currently holds only 231 of 465 Lower House seats.

The support comes during a period of weakening growth.

Japan’s GDP fell 0.4% in the third quarter of 2025, equal to a 1.8% annualised contraction.

Inflation has remained above the Bank of Japan’s 2% target for 43 months and reached 3% in October 2025.

Policymakers expect the new measures to lift real GDP by 24 trillion yen and generate a total economic impact near 265 billion dollars.

Rising market pressure

The fiscal boost has intensified concerns about long-term debt sustainability and market stress.

Five-year credit default swaps on Japanese government bonds reached 21.73 basis points on 20 November, the highest level in six months.

The country’s 40-year bond yield rose to 3.697% immediately after the announcement and climbed further to 3.774% on Thursday.

Every 100-basis-point increase in yields raises annual government financing costs by about 2.8 trillion yen, which has drawn attention to the strain on public finances over time.

Nikkei reports lingering caution about the continued use of fiscal stimulus beyond emergencies, adding another layer to investor concerns.

This debate has become more relevant as the yield curve shifts and Japan’s borrowing costs rise.

These movements are also important for the 20 trillion dollar yen-carry trade. Investors typically borrow yen at low rates and invest in higher-yielding markets overseas.

A mix of higher yields and sudden currency moves can force unwinding.

Historical data show a 0.55 correlation between yen-carry trade reversals and S&P 500 declines, which adds another source of volatility.

Yen reaction

The yen dropped sharply after the stimulus announcement, prompting speculation about future currency stability and the potential for intervention.

October exports rose 3.6% year on year, but the increase was not enough to ease concerns about broader economic pressure.

The scale of fiscal support and the persistence of inflation have become central factors in how global markets interpret Japan’s next steps.

Crypto shift

These conditions are feeding directly into crypto markets.

A weaker yen tends to drive Japanese investors toward alternative assets, including Bitcoin, especially during periods of rising liquidity.

Experts have noted that Japan’s decision adds to a global environment that already includes potential US Federal Reserve easing, Treasury cash movements, and continued liquidity support from China.

Together, these factors are creating conditions that could lift crypto demand into 2026.

At the same time, higher long-term yields pose a risk.

If yen-carry trades unwind quickly, institutions may be forced to sell assets, including Bitcoin, to meet liquidity needs.

The post Japan stimulus shakes global markets as yen sinks and crypto demand rises appeared first on CoinJournal.