Stablecoins use different mechanisms to target a reference value. The mechanism determines which evidence and stress points deserve attention.
Reserve-backed structures
These designs rely on identified reserve assets and an operational path for issuance and redemption. Reserve composition, custody, attestations and legal claims shape the risk picture.
Crypto-collateralized structures
Overcollateralized systems use on-chain assets and liquidation rules. Their resilience depends on collateral quality, oracle design, market liquidity and smart-contract operation.
Algorithmic structures
Some designs adjust supply or incentives without a conventional reserve pool. They can be especially sensitive to confidence, reflexive selling and weakened redemption expectations.
Status update: proposed U.S. payment-stablecoin rules
Proposal, not final rule — published 29 September 2026: the U.S. Federal Reserve published two proposed rules connected with its responsibilities under the GENIUS Act. One proposal addresses Board-qualified payment-stablecoin issuers. The other addresses applications by Board-supervised insured depository institutions seeking approval for a payment-stablecoin subsidiary. Comment deadlines run to 29 December 2026.
These documents are U.S.-specific proposals. They do not change Indian VDA tax treatment, replace FIU-IND guidance, approve a particular stablecoin, promise that a token will hold its target value, or establish that a holder can always redeem. The proposed state must remain visible until a later competent record shows a final and effective rule.
Reserve and redemption concepts in the proposal
The issuer proposal describes identifiable and segregated reserves backing outstanding payment stablecoins on at least a one-to-one basis. It also addresses redemption, capital, liquidity, custody or safekeeping, risk management, recovery planning, recordkeeping and disclosures. Those are issuer-side controls. They do not remove network, custody, legal-claim, operational or market risks.
“One-to-one” is not a complete risk statement. A reader still needs to ask what qualifies as a reserve asset, who holds it, whether it is segregated, how frequently information is reported, what redemption terms apply, and what happens if an issuer, custodian, bank, technology provider or market connection fails. The original reserve-backed, crypto-collateralized and algorithmic distinctions in this article remain relevant.
Deposit insurance is a separate question
The proposal states that payment stablecoins issued by a permitted issuer are not insured by the Federal Deposit Insurance Corporation, are not subject to National Credit Union Administration share insurance, and are not guaranteed by the United States government. A bank’s involvement does not allow a reader to assume that the token itself is an insured deposit.
This is a label-checking problem. “Issued by,” “held at,” “custodied by,” “redeemable with,” “bank subsidiary,” and “insured deposit” describe different relationships. An educational page should identify the relationship established by the source rather than borrowing trust from a familiar institution name.
The companion bank-subsidiary proposal
The companion proposal describes the information a Board-supervised insured depository institution would submit when seeking prior approval to establish and operate a payment-stablecoin subsidiary. An application process is not an approval. Approval of an entity would not, by itself, make every asset, transaction, platform display or holder claim risk-free.
The proposed application material addresses the prospective subsidiary, its operations and the parent institution’s risk-management and oversight responsibilities. That status belongs at the organisational and supervisory layer. The token’s reserve composition, redemption terms, technical operation and custody path remain separate layers that need their own evidence.
What a later update would need to show
A later article should not say the proposed framework “took effect” unless the final rule, effective date and scope are confirmed. Material changes could include revised reserve eligibility, capital requirements, custody conditions, application information, transition periods or disclosure rules. The final text, not the proposal headline, would control those details.
For India context, use the India regulation and VDA tax reader guide. For status language, use How CryptossInsights Labels Uncertainty. This section is general education and does not assess any issuer, token or reader decision.