FDIC Chair just confirmed stablecoin holders won’t get deposit insurance under the GENIUS Act. Here’s what changes.

On March 11, FDIC Chairman Travis Hill announced a proposed rule at the ABA Washington Summit that closes the so-called "pass-through" deposit insurance loophole for stablecoin holders. Under existing rules, there was a theoretical path for financial firms to deposit stablecoins into banks on behalf of customers and have them receive FDIC coverage. Hill's proposal ends that.

The GENIUS Act already stated payment stablecoins are not "subject to deposit insurance." This proposal codifies it at the regulatory level so there's no ambiguity when a bank holding stablecoin reserves eventually fails.

What this means practically: 716 million crypto users globally hold some portion of their assets in stablecoins. None of those holdings have federal deposit protection. The 1:1 reserve requirement under the GENIUS Act reduces but does not eliminate risk — depeg events, custodial failures, and protocol exploits remain uninsured.

The coverage gap in crypto isn't new. Less than 2% of crypto assets are currently insured by any mechanism, centralized or decentralized. This ruling makes that gap more visible and more permanent.

Source: FDIC Chairman Travis Hill, ABA Washington Summit, March 11, 2026.