The proposed rule establishes a comprehensive federal framework for payment stablecoin issuance, covering reserves, redemption, capital, custody, and licensing, while deferring anti-money laundering rules to a separate Treasury-coordinated rulemaking.
On Feb. 25, 2026, the Office of the Comptroller of the Currency (OCC) issued a sweeping notice of proposed rulemaking that would establish the first comprehensive federal regulatory framework governing payment stablecoins issued by entities under its jurisdiction. The 376-page proposal, spanning five parts of the Code of Federal Regulations, translates the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law on July 18, 2025, into enforceable operational rules governing every phase of the stablecoin lifecycle, from application and chartering through reserve management, redemption, supervision, and wind-down.
The proposal represents one of the most impactful steps to date in translating the statutory framework described in the GENIUS Act into operational regulatory standards for stablecoin issuers within the U.S. financial system. The rulemaking covers all regulations the OCC is required to promulgate under the GENIUS Act, except those related to the Bank Secrecy Act, anti-money laundering (AML), and Office of Foreign Assets Control sanctions, which will be addressed through a separate rulemaking coordinated with the Department of the Treasury. The OCC has opened a 60-day public comment period, with submissions due by May 1, 2026.
A New Regulatory Architecture: 12 CFR Part 15
The centerpiece of the proposal is a new Part 15 of Title 12 of the Code of Federal Regulations (CFR), designed to house the supervisory framework for payment stablecoin issuers. The regulation is organized into five subparts addressing definitions and scope (Subpart A), permissible activities and operational requirements (Subpart B), custody standards (Subpart C), application and registration procedures (Subpart D), and capital adequacy (Subpart E). The proposal also amends the OCC’s existing capital adequacy standards in 12 CFR 3, prompt corrective action rules in 12 CFR 6, assessment fees in 12 CFR 8, and procedural rules in 12 CFR 19.
The rule’s scope extends to national banks and their subsidiaries; federal savings associations and their subsidiaries; federal branches and their subsidiaries; foreign payment stablecoin issuers; non-bank entities seeking or holding federal qualified payment stablecoin issuer status; and certain state-qualified issuers for which the OCC has regulatory or enforcement authority. This coverage encompasses the full spectrum of entities that might issue or facilitate payment stablecoins within the federal banking system.
Reserve Requirements: 1:1 Backing with High-Quality Liquid Assets
The reserve regime is prescriptive and applied continuously. Under proposed Section 15.11, issuers must maintain identifiable, segregated reserve assets with a total fair value that equals or exceeds the par value of all outstanding payment stablecoins at all times. The reserves must be held separately from the issuer’s operating assets and cannot be commingled with other funds.
Permissible reserve assets are limited to a defined list of high-quality liquid instruments: U.S. currency and Federal Reserve balances; demand deposits or insured shares at insured depository institutions; short-dated U.S. Treasury securities with 93 days or less remaining to maturity; overnight repurchase and reverse repurchase agreements that meet specified collateral, counterparty, clearing, and overcollateralization terms; qualifying government money market funds; other similarly liquid federal government assets approved by the OCC; and tokenized versions of certain eligible assets.
The proposal effectively codifies a narrow reserve model, similar to the structures long advocated by bank regulators. This emphasizes highly liquid government assets rather than broader investment portfolios sometimes used by privately issued stablecoins.
Two Approaches to Diversification
To implement the GENIUS Act’s statutory diversification requirements, the OCC proposes two alternative approaches and specifically solicits public comment on which to adopt. Under Option A, a principles-based standard would apply, supplemented by a quantitative safe harbor. An issuer that maintains at least 10% “daily liquidity” (assets accessible within one business day), at least 30% of reserves available within five business days, no more than 40% exposure to any single eligible financial institution, no more than half of daily liquidity concentrated at any one institution, and a portfolio with a weighted-average maturity of 20 days or less would be deemed compliant with the diversification standard.
Under Option B, those same thresholds would be mandatory daily limits rather than safe harbors, creating a more rigid but predictable compliance obligation. The choice between principles-based flexibility and bright-line certainty is among the most consequential design decisions in the proposal.
The policy choice between these two approaches carries meaningful implications for how the market is structured. On one hand, a principles-based framework would provide issuers the flexibility to adapt reserve strategies as markets evolve; on the other, a mandatory quantitative regime would prioritize supervisory clarity and consistency across issuers. The OCC’s request for comments suggests the agency is still weighing how prescriptive the final framework should be in an emerging sector where liquidity dynamics may change rapidly.
The rule also requires large issuers to maintain a minimum proportion of insured deposits or insured shares, up to a dollar cap, creating an additional layer of protection tied to the deposit insurance system. Monthly reserve composition reports must be posted publicly by noon on the last day of each month, and a registered public accounting firm must examine the prior month-end report on the same timeline. The CEO and chief financial officer (CFO) must submit a monthly accuracy certification to the OCC. Any shortfall in reserve assets triggers an immediate halt to net new issuance until cured.
Redemption Standards: Par Value Within Two Business Days
Proposed Section 15.12 establishes a mandatory two-business-day redemption window as the standard operating requirement, with a minimum redemption threshold of one stablecoin. Issuers must publish a clear redemption policy and honor all valid requests at par, i.e., one stablecoin per dollar, with no haircuts or discounts.
When redemption demands exceed 10% of the outstanding issuance value in any rolling 24-hour period, the redemption window automatically extends to seven calendar days for all outstanding and subsequent requests during that period. During this stress extension, issuers may not selectively honor redemptions without OCC approval — a provision intended to prevent preferential treatment of large institutional holders during a run scenario. The issuer must notify the OCC within 24 hours of crossing the threshold. Only the OCC, not the issuer, may impose additional limitations on redemptions.
Issuers must provide clear, conspicuous purchase and redemption disclosures that include all fees and a link to the monthly reserve report. Any fee change requires at least seven calendar days’ prior notice to customers and must be posted on the issuer’s website and in customer agreements.
The Yield Prohibition: Stablecoins as Cash, Not Deposits
One of the proposal’s most consequential provisions is a bright-line prohibition on interest, yield, and rewards paid by issuers to holders of payment stablecoins. Proposed Section 15.10(c)(4) codifies the GENIUS Act’s prohibition by providing that a permitted payment stablecoin issuer may not pay a holder any interest or yield, whether in cash, tokens, or other consideration, solely in connection with the holding, use, or retention of a payment stablecoin.
The OCC goes further by targeting potential evasion structures. The rule creates a rebuttable presumption that certain arrangements with affiliates or related third parties, including white-label relationships, that result in payments to holders violate this prohibition. The presumption is triggered when two conditions are met: The stablecoin issuer has a contract or arrangement with an affiliate or related third party to pay interest or yield to that party, and the affiliate or related third party has a separate arrangement to pay interest or yield to a holder of the payment stablecoin.
This structure is aimed squarely at business models in which an exchange or platform, rather than the issuer, distributes yield through revenue-sharing arrangements with the issuer. The American Bankers Association and other industry groups have warned that such yield arrangements could trigger substantial deposit outflows from traditional banks, potentially amounting to trillions, undermining banks’ ability to extend credit. Crypto advocates, by contrast, argue that competitive yields are essential for adoption and that overly restrictive rules could drive activity offshore.
The prohibition channels payment stablecoins toward operating as cash-like or stored-value instruments rather than as deposit or investment products, drawing a clear functional line between stablecoins and bank deposits. In doing so, the rule attempts to preserve the traditional banking system’s role in deposit intermediation while still allowing stablecoins to function on a practical level as payment instruments.
Capital Requirements and Operational Backstop
The proposed regulatory capital framework comprises two elements: common equity tier 1 capital (common stock) and additional tier 1 capital (including qualifying noncumulative perpetual preferred stock classified as equity under Generally Accepted Accounting Principles (GAAP)). Notably, the OCC does not propose a tier 2 capital element for permitted issuers.
During an initial three-year de novo period, issuers must maintain minimum capital as specified in their licensing conditions, subject to a $5 million floor. The OCC emphasizes that this amount is a statutory floor, not a safe harbor; the agency retains discretion to require higher capital levels based on projected transaction volume, redemption exposure, the complexity of reserve management, reliance on third-party service providers, cross-border footprint, and operational risk profile. After the de novo period, issuers must maintain capital commensurate with their risk level and demonstrate a process and strategy to sustain appropriate capital.
Beyond regulatory capital, the proposal introduces an operational backstop requirement. Issuers must maintain a designated pool of highly liquid assets sufficient to fund 12 months of total operating expenses, including utilities, data processing, and salaries, held separately from reserve assets. The backstop amount is recalculated quarterly using the issuer’s four most recent quarterly expense reports. Two consecutive quarters of shortfalls trigger mandatory wind-down proceedings. This requirement helps circumvent regulatory concerns that a stablecoin issuer experiencing operational distress could lose the capacity to process redemptions even if reserve assets remain intact.
Risk Management, Custody, and Operational Standards
The OCC proposes principles-based operational and risk management standards tailored to the specific risks of stablecoin activities. Proposed Section 15.13 covers internal controls and information systems, internal audit functions, interest-rate risk management, oversight of insider and affiliate transactions, third-party risk oversight, and incident notification procedures for sensitive customer information, including private cryptographic keys.
Custody requirements under proposed Subpart C impose segregation and non-commingling obligations for covered customer assets, with specific provisions governing the prudent use of omnibus accounts under robust controls. The rules also address hardware and software exclusions for self-custody when no custodial claims are made.
Issuers are prohibited from using deceptive names, specifically any combination of terms relating to the United States Government, including “United States,” “United States Government,” or “USG,” in the name of a payment stablecoin. The abbreviation “USD” remains permissible when it relates directly to the pegged currency. Issuers also may not market stablecoins in a way that a reasonable person would perceive them as legal tender, issued or guaranteed by the U.S., or subject to federal deposit insurance.
Application and Licensing Framework
Proposed Section 15.30 establishes a formal application and approval framework with two principal pathways. The first applies to insured national banks, federal savings associations, and insured federal branches seeking to issue payment stablecoins through a subsidiary. The second applies to non-bank entities, uninsured national banks, and uninsured federal branches seeking authorization as federal qualified payment stablecoin issuers.
Applications must be submitted on an OCC-specified form and include comprehensive information on the applicant’s financial condition, business plan, compliance infrastructure, and key personnel. Each director, executive officer, and principal shareholder must submit an interagency biographical and financial report — the same disclosures used in traditional bank chartering and many licensing reviews. The OCC retains the authority to collect fingerprints and submit them to the FBI for national criminal history background checks.
Within 30 days of receiving an application, the OCC must notify the applicant whether the submission is “substantially complete.” Once deemed substantially complete, the application is automatically approved on the 120th day, unless the OCC issues a formal denial. A denial must include a written explanation that identifies all material shortcomings and provides actionable recommendations. Applicants may request a hearing to appeal a denial within 30 days.
Foreign Issuer Registration
For foreign payment stablecoin issuers, the proposal establishes a separate registration pathway. The secretary of the Treasury must first determine that the issuer’s home jurisdiction maintains a regulatory regime “comparable” to the GENIUS Act. Once that determination is made, the registrant files with the OCC, and registration is deemed approved on the 30th day unless the OCC rejects it.
Registered foreign issuers must submit to OCC supervision and provide reports comparable to those required of domestic permitted issuers. When followed, this framework allows for cross-border stablecoin activity while also ensuring that foreign issuers operating in the U.S. remain subject to supervisory oversight comparable to that applied to domestic entities.
Supervision, Reporting, and Examination
The OCC would conduct full-scope examinations at least every 12 months, with discretion to extend the cycle to 18-36 months for qualifying smaller issuers that meet specified conditions. More frequent examinations would remain available at the OCC’s discretion.
Issuers must file weekly confidential reports in the form and manner specified by the OCC, along with standardized quarterly financial condition reports due within 30 days of quarter-end, similar to the call reports filed by national banks. Upon request, issuers must submit additional reports on financial condition, risk systems, and compliance with the Act and Part 15. Within 180 days after approval and annually thereafter, the board must certify that the issuer’s AML and sanctions programs are reasonably designed to prevent money laundering and terrorism financing.
Issuers with more than $50 billion in outstanding issuance that are not reporting companies under the Securities Exchange Act must prepare GAAP-compliant annual financial statements, have them audited by a registered public accounting firm, post them publicly, and file them with the OCC within 120 days of the fiscal year-end.
The $10 Billion State-Issuer Transition Trigger
The proposal establishes a significant transition mechanism for state-qualified payment stablecoin issuers. Under proposed Section 15.15, a non-bank state-qualified issuer exceeding $10 billion in outstanding issuance must notify the OCC within five calendar days and either transition to the federal framework within 360 days or cease net new issuance. A waiver process is available to issuers that demonstrate adequate state-level oversight, but the default presumption is federal absorption at scale.
This threshold effectively caps the size of state-supervised stablecoin operations, ensuring that systemically significant issuers operate within the federal regulatory perimeter. In practice, this threshold may shape the growth strategies of state-regulated stablecoin issuers, effectively encouraging large platforms to transition to federal supervision once issuance scales. The provision reflects the GENIUS Act’s broader policy of preserving state-innovation pathways while channeling large-scale issuance into federal oversight.
Self-Executing Provisions and Preemption
The OCC notes that several GENIUS Act provisions are self-executing and therefore not addressed in this rulemaking. These include provisions clarifying the OCC’s exclusive role in overseeing federal-qualified payment stablecoin issuers, ensuring single-licensing requirements for federally chartered issuers, and preserving state consumer protection laws. Federal savings associations that hold qualifying reserves are automatically exempt from the qualified thrift lender test with respect to those reserve assets.
The OCC’s exclusive supervisory authority over federal-qualified payment stablecoin issuers preempts duplicative state oversight, preventing other regulators from imposing additional examination, supervision, or licensing burdens on these entities, while the GENIUS Act expressly preserves state consumer protection laws. The OCC invites public comment on whether these self-executing provisions should be codified in regulation for convenience and clarity.
Interagency Context and Timeline Pressure
The OCC’s proposal does not come in isolation. The Federal Deposit Insurance Corporation (FDIC) published its own proposed rule on application procedures under the GENIUS Act in December 2025, with the comment period extending into May 2026. The National Credit Union Administration (NCUA) followed on Feb. 11, 2026, with a proposal covering credit union subsidiaries, with comments due by April 13. The Federal Reserve has yet to publish a formal proposal, which is a notable absence that introduces potential coordination challenges for the overall regulatory framework.
The GENIUS Act takes effect on the earlier of 18 months after enactment, which places the statutory backstop date at Jan. 18, 2027, or 120 days after the primary federal payment stablecoin regulators issue their final implementing regulations. Since the 120-day clock begins only once all primary regulators have issued final rules, any significant delay by a single agency delays the trigger and compresses the time available for industry preparation. The OCC has signaled that it may extend its comment period to align with the other agencies’ timelines.
Comptroller of the Currency Jonathan V. Gould emphasized the agency’s intent to strike a careful balance between safety and innovation. “Stablecoins represent a legally permissible new payment tool,” the OCC stated in its announcement. The agency poses 211 distinct questions throughout the proposal, covering every major provision, signaling that the framework remains open to meaningful revision before finalization.
What Comes Next: BSA/AML Rules and Beyond
Conspicuously absent from this proposal are the AML and sanctions compliance requirements the GENIUS Act mandates for payment stablecoin issuers. The OCC explicitly states that these rules will be addressed in a separate rulemaking coordinated with the Department of the Treasury. In the interim, the proposal requires issuers to certify annually that their AML and sanctions programs are reasonably designed, but the detailed compliance architecture, examination standards, and enforcement mechanisms specific to illicit finance risks in stablecoin operations are still forthcoming.
The OCC also notes that additional regulations beyond those in this rulemaking may need updating in light of the GENIUS Act. For example, the agency is considering whether regulations that impose different requirements at different asset thresholds should be amended to exclude stablecoin reserves from asset calculations. This is a technical but significant question for banks whose balance sheets may grow substantially through stablecoin reserve holdings.
With five federal agencies now translating the GENIUS Act into operational rules and the January 2027 statutory backstop approaching, the coming months will be critical for the development of the U.S. stablecoin regulatory framework. Whether these parallel rulemaking efforts will ultimately converge into a coherent national system as intended or produce new issues between banking, securities, and payments regulators will shape how stablecoins evolve in the U.S. financial system for years to come.
Sources
[1] Office of the Comptroller of the Currency, “Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency,” Notice of Proposed Rulemaking, 12 CFR Parts 3, 6, 8, 15, and 19, Docket ID OCC-2025-0372, RIN 1557-AF41 (Feb. 25, 2026).
[2] OCC Bulletin 2026-3, “GENIUS Act Regulations: Notice of Proposed Rulemaking,” OCC.gov (Feb. 25, 2026).
[3] Guiding and Establishing National Innovation for U.S. Stablecoins Act, Pub. L. No. 119-27, 12 U.S.C. § 5901 et seq. (2025).
[5] FDIC, Notice of Proposed Rulemaking, GENIUS Act Application Procedures, 90 FR 59409 (Dec. 19, 2025).
[6] NCUA, Notice of Proposed Rulemaking, GENIUS Act Implementation for Credit Union Subsidiaries (Feb. 11, 2026).
[7] White House, “Strengthening American Leadership in Digital Financial Technology” Report (July 17, 2025).
© Copyright 2026. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC, its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
