The U.S. Federal Reserve on Thursday proposed new rules for issuers of U.S. dollar-backed cryptocurrency tokens known as stablecoins, as required by last year’s GENIUS Act, which established a federal regulatory framework for the tokens.

Under the proposal, the Fed would require that payment stablecoin issuers under its supervision fully back their tokens with certain reserve assets, such as short-term Treasury bills.

The proposal would also impose capital requirements on stablecoin issuers to address certain credit and operational risks.

If enacted, the new rules would introduce…