Stablecoins and the Path to Legitimacy: Carlo D’Angelo on Regulation, Banks, and the FDIC’s First GENIUS Act Rule

By: Moish E. Peltz, Esq. and Kyle M. Lawrence, Esq.

When Carlo D’Angelo joined Block & Order in mid-December, he spoke with unusual confidence about where stablecoins were headed in the United States. At a time when much of crypto regulation still felt unsettled, D’Angelo argued that stablecoins had crossed a threshold other digital assets had not, thanks to the passage of the GENIUS Act and the direction it set for federal oversight.

D’Angelo brings that confidence from a career spent navigating complex, high-stakes legal systems. He practiced criminal defense for nearly three decades and later taught legal writing and advanced research as a law professor, developing a reputation for breaking down dense legal concepts into practical guidance. When he began paying closer attention to crypto during the early NFT cycle, he approached it with the same instinct he had honed in courtrooms and classrooms: figure out how the law actually works when applied to messy, real-world facts.

Kyle Lawrence and Moish Peltz first met D’Angelo in 2020 at the inaugural NFT NYC conference, where the three found themselves in a long conversation about how existing legal frameworks might apply to a rapidly forming digital assets industry. That discussion evolved into an ongoing group chat among a small circle of lawyers trading ideas, case law, and regulatory theories in real time as the space developed. That shared history gives D’Angelo’s perspective on Block & Order particular weight, as he has watched the industry move from informal legal theorizing and reactive enforcement toward the early contours of durable regulatory structure. 

After years spent defending clients and advising startups through uncertainty and legal risk, Carlo has increasingly focused on helping businesses design stablecoin strategies that align with emerging federal frameworks. “That is where the puck is going when it comes to the digital asset space,” D’Angelo said, explaining why he had shifted his professional focus. 

At the time of the episode’s recording, however, the regulatory framework implementing the GENIUS Act hadn’t begun to take shape. Agencies had signaled their intent to act, but no formal rules had yet been proposed. Days later, the Federal Deposit Insurance Corporation released its first notice of proposed rulemaking under the GENIUS Act, outlining how FDIC-supervised banks could seek approval to issue payment stablecoins through subsidiaries. The proposal offers a concrete illustration of the progress D’Angelo described, and why he believes stablecoins are positioned to become a foundational part of the U.S. financial system.

Why Stablecoins Are Moving First

Throughout the episode, D’Angelo emphasized that stablecoins occupy a different regulatory and economic category than other digital assets. Rather than marketing them as speculative instruments, he framed them as payment infrastructure — digital dollars designed to move faster and cheaper than traditional banking rails.

“When I saw the GENIUS Act and what it could do, a light bulb went off for me,” D’Angelo said. “This is where we need to be putting our efforts because once we get people to understand that they can move money on blockchains via fully regulated digital dollars, that’s going to open up the door to alts and bitcoin and all the fun stuff that we enjoy doing.”

That framing aligns closely with the FDIC’s proposed rule, which focuses narrowly on payment stablecoins and treats them as an extension of the regulated banking system rather than as a novel asset class. The proposal establishes an application and approval process for insured state nonmember banks and savings associations that want to issue stablecoins through subsidiaries, referred to as permitted payment stablecoin issuers. It also emphasizes safety, soundness, governance, and compliance, each of which are core banking concepts that D’Angelo discussed on the podcast. 

Regulation as an On-Ramp, Not a Roadblock

Another recurring theme in D’Angelo’s commentary was that clear regulations lower barriers to adoption rather than raising them. For example, banks and other large, regulated institutions are not philosophically opposed to stablecoins, but are constrained by uncertainty and legal risk.

“BlackRock understands, Vanguard understands, Charles Schwab knows, [and] Fidelity knows that eventually anything that can be traded is going to be tokenized and moving on blockchains 24/7. But before they can fully commit to this stuff — and they plan to commit to this stuff, mark my words — they are waiting for…clarity from the markets.” D’Angelo said. “And the markets unfortunately are not going to full-port, especially the banks, until they know that they have the full blessing of Congress.”

The FDIC’s proposed GENIUS Act rule exemplifies that shift from ambiguity to process. It lays out how applications will be reviewed, what information banks must provide, and how the FDIC will evaluate safety and soundness. For regulated institutions, that procedural clarity is often the difference between waiting on the sidelines and jumping into the fray.

Banks, Stablecoins, and the Question of Competition

One of D’Angelo’s more provocative arguments was that stablecoins pose a competitive challenge to banks precisely because they improve on core banking functions like payments and settlement.

“Banks are incredibly threatened by stablecoins because they know that it’s going to be a flight of depositor money out of banks and into other opportunities,” D’Angelo said.

Yet he also stressed that regulation like the GENIUS Act, and the FDIC’s implementation of it, offers banks a way to participate rather than be displaced. By issuing compliant stablecoins, banks and bank-affiliated entities can integrate blockchain-based payments into their existing customer relationships while maintaining regulatory oversight.

The FDIC’s proposal reflects that balance. It does not open stablecoin issuance to unregulated actors, nor does it attempt to wall banks off from the technology. Instead, it situates stablecoins within the familiar supervisory framework of insured institutions, requiring governance controls, compliance with AML and sanctions obligations, and regulatory approval before issuance.

“The icing on the cake for all of this is that [stablecoins are] backed by [the U.S.] Treasury,” D’Angelo said. “There isn’t another cryptocurrency that has that blessing.”

Progress in Motion, Not the Final Word

D’Angelo was careful to note that the GENIUS Act itself was only the beginning, and that further rulemaking would be necessary to fully operationalize stablecoin issuance in the United States. “This is really the kerosene we needed,” he said. 

The FDIC’s proposed rule fits squarely within that narrative. It does not resolve every open question around reserves, disclosures, or interoperability, but it demonstrates that federal regulators are actively translating statutory authority into supervisory practice. For lawyers, banks, fintechs, and payment companies, that translation is what turns legislation into usable infrastructure.

As the proposal moves through the notice-and-comment process, companies have an opportunity to engage with how payment stablecoins are issued and supervised going forward.

 If you are evaluating stablecoin strategies or assessing how the GENIUS Act may affect your operations, early engagement with the regulatory framework is critical. Falcon Rappaport & Berkman’s digital asset team, including Kyle Lawrence and Moish Peltz, can help you navigate stablecoin compliance, bank-affiliated issuance structures, and evolving federal oversight.

For guidance tailored to your business, reach out to FRB Partners Moish E. Peltz and Kyle M. Lawrence, who advise clients across digital assets, AI, and other emerging technologies.

DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.