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1. OCC Finalizes Its Stablecoin Regulation
The Office of the Comptroller of the Currency (OCC) issued its final rule implementing the GENIUS Act on Wednesday, October 21, making it the first federal banking regulator to complete stablecoin regulation under the 2025 law. The rule takes effect on January 18, 2027, the same day as the statute. It sets standards for reserves, redemption and risk management, drops a proposed presumption against certain yield arrangements, and keeps a $5 million minimum capital requirement.
The OCC, a bureau of the U.S. Treasury that charters and supervises national banks and federal savings associations, published the text after a comment period that began with a February proposal. Its release arrives ahead of the January deadline written into the law, although the broader set of federal agencies tasked with GENIUS Act rules has not yet finished its own work.
2. What does the OCC final rule cover?
The rule applies to payment stablecoin issuers that fall under OCC jurisdiction. That group includes subsidiaries of national banks and federal savings associations, federally approved nonbank issuers, certain state-qualified issuers and foreign issuers that come within the agency's reach. It also reaches some custody services provided by firms the OCC already supervises, such as national banks, federal savings associations and federal branches.
On substance, the text addresses reserves, redemption, risk management, audits and reporting, custody, the application process, the oversight of foreign issuers, and a capital and operational backstop. It also lays out how a state-qualified issuer can move into the federal framework and the circumstances in which the OCC may revoke an approval it has granted.
Some pieces are deliberately absent. Anti-money laundering, Bank Secrecy Act and sanctions requirements will be handled in a separate rulemaking carried out with the Treasury Department. The Financial Crimes Enforcement Network and the Office of Foreign Assets Control proposed their own measures on those subjects in April, so issuers will eventually face a layered set of obligations rather than a single document.
3. Why was the yield test removed?
The most closely watched change involves interest-like payments to holders. The GENIUS Act prohibits issuers from paying yield on payment stablecoins, and the OCC’s February proposal would have treated certain arrangements with affiliates or related third parties as violations of that ban unless the issuer could rebut the presumption. The final rule contains no such presumption.
The agency’s stated reasoning is that payment stablecoins are a nascent market, which in its view makes a rebuttable presumption inappropriate at this stage. The Federal Reserve took a comparable approach in a proposal it issued in September, so the OCC’s retreat sets its text apart from at least one other agency’s current draft.
Dropping the presumption does not mean the OCC has stepped back from enforcement. It keeps the authority to act against schemes that evade the yield ban, and it says it will examine such arrangements when it reviews license applications and during ongoing supervision. Where it finds violations, the agency has said it will issue public guidance describing them, which gives the industry a path to learn the boundaries as cases emerge.
4. How are rewards programs treated?
Rewards offered through exchanges and other platforms are the practical battleground. The statute bars payments made solely in connection with holding or using a stablecoin, and the OCC indicated it will apply that wording case by case. It gave no examples of prohibited rewards, and it signaled that a reward made at least in part for other reasons would fall outside the ban.
Existing programs receive no safe harbor. The agency will not assume that a rewards program created before the law complies with it, and it said that Congress’s awareness of such programs should not be read as an endorsement. Exchanges that run long-standing rewards schemes should therefore expect their arrangements to be examined, with sign-off from the OCC needed where those programs touch an OCC-regulated issuer.
Large consumer brands offer rewards today. PayPal offers 4% on its PYUSD stablecoin, Coinbase One members receive 3.75% on USDC, and Kraken+ subscribers can earn up to 4.5% on USDG. Since the proposal appeared, parts of the industry have argued that certain secondary-platform rewards remain legal, a reading the final rule neither endorses nor rules out in advance.
5. Redemption window and capital floor
Issuers must still honor redemption requests within two business days. A proposed automatic seven-day extension, which would have applied whenever daily redemption requests exceeded 10% of a stablecoin’s outstanding issuance, was removed from the final text.
In its place sits a notification duty and an opt-in mechanism. If requests exceed 10% of outstanding issuance for a stablecoin brand within a 24-hour period, the issuer must inform the OCC within 24 hours, as the proposal also required. The issuer may then ask the agency for more time, and the OCC can approve or deny that request. The delay is no longer automatic, so a run on a coin would put the decision with the regulator.
The $5 million minimum capital floor from the proposal remains in the final rule. Reserve requirements were also reworked. Rather than prescribing a fixed formula, the OCC adopted a principles-based approach to diversification and concentration, supported by daily liquidity minimums and limits on exposure to any single counterparty.
6. What officials said
Comptroller of the Currency Jonathan V. Gould described the rule as a clear, practical framework for payment stablecoin innovation, one that pairs that innovation with strong reserve, redemption and risk standards. Agency officials also said the framework opens opportunities for a wide range of institutions, including community banks.
Treasury Secretary Scott Bessent compared the GENIUS Act to the National Currency Act of 1863, which created a federal framework for national banknotes under President Abraham Lincoln. In the OCC’s release he characterized the stablecoin law as the foundation for a federal framework covering payment stablecoins.
The OCC said it received about 328 comments on its proposal from crypto companies, community bankers, trade groups and academics. Citing the early stage of the industry, it said it will monitor the sector and adjust the framework as conditions require.
7. Where the banking lobby and Congress stand
Yield has been the central dispute in the debate over stablecoin policy. Bankers regard rewards programs as a threat to deposits, and banks have lobbied to tighten the GENIUS Act’s language through the Digital Asset Market Clarity Act. That bill failed to advance in a Senate vote last month and lacked unanimous Republican support.
Some commenters urged the OCC to wait for possible changes through the Clarity Act before finalizing. The agency declined, saying it must implement the statute as it was enacted until new legislation passes. For now the GENIUS Act remains the governing standard, and the OCC’s text follows it. Bank deposits have continued to grow even as stablecoin supply has expanded, a point often cited by those who doubt that rewards pose a systemic risk to lenders.
8. Why the design choices matter for issuers
A stablecoin is a token pegged to the U.S. dollar, and its value rests on the promise that a holder can turn it back into cash. Redemption timing therefore sits at the center of any rulebook. A two-business-day standard gives holders a predictable exit, while the loss of the automatic extension means an issuer under heavy withdrawal pressure cannot count on extra time without asking for it.
Making the extension a request puts the regulator in the loop at the moment of stress. The 24-hour notification trigger gives the OCC early warning of a possible run, and its power to approve or deny a delay lets it weigh the issuer’s reserves and liquidity before letting a deadline slip. For holders, that is a firmer commitment than the proposal offered.
The principles-based reserve language gives issuers room to choose how they hold assets, while the daily liquidity minimums and single-counterparty limits guard against the kind of concentration that can turn a banking problem into a stablecoin problem. The $5 million capital floor is modest for a large issuer but sets a baseline for smaller entrants, including community banks that may look at the market.
Removing the yield presumption changes who carries the burden. Under the proposal an issuer that worked with an affiliate or a related third party would have had to prove its innocence. Under the final text the OCC must identify a problem through its own review, which is a lighter burden for companies and leaves the agency to build its record through supervision.
9. Other agencies are still at work
No federal regulator met the statute’s mid-year deadline for rulemaking, and the OCC is the first banking agency to finish. Treasury proposed its GENIUS Act rule in August, and the industry is watching how that document handles foreign issuers such as Tether. The Federal Deposit Insurance Corporation issued application standards in December 2025 and proposed an approach for state-chartered issuers in April.
The Federal Reserve’s September proposals cover subsidiaries of member banks that issue stablecoins, including procedures, capital and reserves. Because several comment periods are still running, not every rule will be final when the law takes effect in January.
10. What happens next for issuers
The OCC has not said when it will start accepting applications and waiver requests from issuers, and it has said it will announce that date separately. In August, Gould said the agency aimed to finalize its rule by November so it could begin processing applications early in the new year, a schedule it has now beaten.
The immediate tasks for companies are to review their reserve and redemption practices against the final text, assess any rewards arrangements against the agency’s case-by-case reading of the yield ban, and prepare for a separate anti-money laundering rule that will arrive through Treasury. The January 18, 2027 effective date is the next fixed milestone.