#USOCCIssuesNewStablecoinRules

#USOCCIssuesNewStablecoinRules
OCC Releases Detailed Proposed Rules to Implement the GENIUS Act for Payment Stablecoins – Comprehensive Breakdown
On February 25, 2026, the Office of the Comptroller of the Currency (OCC) issued a 376-page Notice of Proposed Rulemaking (NPRM) to implement key parts of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), enacted on July 18, 2025. This is a major step toward a federal regulatory framework for "payment stablecoins" – digital assets designed for payments or settlement, redeemable at a fixed monetary value (typically 1:1 with USD).
The proposal is not final law yet. It seeks public comments for 60 days after publication in the Federal Register. Once finalized, these rules will apply to entities under OCC jurisdiction, including national banks, their subsidiaries, federal qualified issuers, certain state-qualified issuers, and foreign payment stablecoin issuers serving U.S. users. Separate rules for Bank Secrecy Act, AML, and OFAC sanctions will come later with Treasury coordination.
Here are the main points, explained one by one with full details:
Definition and Scope of Payment Stablecoins
The rules focus only on "payment stablecoins" – digital assets used as a means of payment or settlement, where the issuer must redeem them for a fixed amount of monetary value (e.g., $1 per token). They aim to maintain stable value relative to that fixed amount. Non-payment stablecoins or other digital assets fall outside this framework.
Licensing and Permission Requirements for Issuers
Only "permitted payment stablecoin issuers" can issue these in the U.S. This includes subsidiaries of national banks/federal savings associations, federal qualified nonbank issuers, and certain state-qualified issuers under OCC oversight.
Foreign issuers must register as "Foreign Payment Stablecoin Issuers" to offer to U.S. users.
New (de novo) issuers face a proposed $5 million minimum capital floor to ensure they have enough resources to start operations safely.
Strict 1:1 Reserve Backing with High-Quality Liquid Assets
Stablecoins must be backed 1:1 by safe, liquid reserves such as cash, U.S. Treasuries, or other approved short-term, low-risk instruments.
Requirements cover reserve composition, diversification to limit concentration risk, proper valuation, segregation (reserves kept separate from issuer's own funds), and secure custody arrangements.
This prevents mismatches that could lead to instability or inability to redeem during stress.
Prohibition on Interest or Yield – Extended to Indirect Arrangements
The GENIUS Act bans paying interest or yield solely for holding, using, or retaining the stablecoin (to avoid competing with bank deposits).
The OCC proposes a rebuttable presumption of violation if: (a) an issuer's affiliate or related third party pays yield to holders tied to the stablecoin, or (b) the issuer pays yield to an affiliate/third party for that purpose.
This targets workarounds like revenue-sharing with platforms or exchanges that offer rewards to holders.
Mandatory Redemption Mechanics and Prompt Redeemability
Holders must have the right to redeem stablecoins promptly at par (1:1 with the fixed value, e.g., USD).
Rules detail redemption processes, including timelines, procedures, and issuer obligations to handle redemptions efficiently without undue delay or conditions.
Robust Risk Management and Operational Standards
Issuers need comprehensive controls for credit, market, liquidity, operational, and cyber risks.
Governance, internal policies, and resilience measures are required to manage smart contract risks, fraud, and other operational issues.
The proposal introduces a new "capital and operational backstop" framework, with amendments to existing bank capital rules (12 CFR Parts 3 and 6) for tailored adequacy standards.
Custody Requirements for Reserves and Customer Assets
Reserves and any customer-held stablecoins must be held in safe, segregated accounts.
OCC-supervised banks conducting custody must follow strict standards for segregation, protection, and auditability to safeguard against commingling or loss.
Supervision, Examinations, Reporting, and Enforcement
The OCC will supervise permitted issuers through regular examinations, required reporting, and audits.
Enforcement authority extends to violations, including over foreign issuers under jurisdiction.
Transparency rules may include public disclosures on reserves and operations.
Additional Limits and Considerations
The proposal explores restricting each permitted issuer to one brand of stablecoin (to curb white-label or multi-branded models that could enable deposit-like features).
It emphasizes protecting financial stability, consumer rights, and preventing risks to the banking system.
Why This Matters Overall
This NPRM delivers critical regulatory clarity after years of uncertainty, enabling banks and qualified entities to enter stablecoin issuance safely. It promotes mainstream adoption for payments, remittances, and on-chain finance while enforcing strong safeguards for reserves, redemptions, and no-yield models. It strengthens the U.S. dollar's digital role, reduces risks from unregulated issuers, and could drive liquidity and innovation – though the strict yield ban and capital floors may pose challenges for some business models. Final rules (post-comments) could take effect by mid-2027 or earlier.