OCC Proposes New Stablecoin Rules Under GENIUS Act

The Office of the Comptroller of the Currency has unveiled a sweeping proposal to implement the GENIUS Act, setting strict standards for stablecoin issuers and opening a 60 day public comment period.

Key Takeaways

• OCC released a 376 page proposal to implement the GENIUS Act framework for payment stablecoins.
• The draft would require one to one reserve backing and strict redemption rights.
• Issuers under OCC supervision would be barred from paying stablecoin yield.
• Public comments are open for 60 days before the rule is finalized.

What Happened?

The Office of the Comptroller of the Currency has issued a notice of proposed rulemaking to carry out the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act. The proposal outlines how payment stablecoin issuers under OCC jurisdiction would be regulated, including reserve standards, risk management requirements, and limits on offering yield.

The proposal follows the GENIUS Act’s passage in July 2025, which created the first federal framework governing payment stablecoins in the United States.

OCC Lays Out Comprehensive Stablecoin Framework

The 376 page proposal addresses nearly all rulemakings required under the GENIUS Act, except those related to the Bank Secrecy Act, anti money laundering, and sanctions compliance, which will be handled separately in coordination with the Department of the Treasury.

Under the draft, the majority of the new regulations would be housed in a new section of federal banking rules and would cover:

• Permissible activities for payment stablecoin issuers
• Reserve asset requirements
• Redemption obligations
• Risk management and cybersecurity standards
• Audits, reporting, and supervision
• Custody requirements
• Application and registration procedures
• Examination of foreign issuers
• Revocation of issuer approvals
• Capital and operational backstop requirements

The OCC clarified that it would have regulatory or enforcement authority over subsidiaries of national banks and federal savings associations, federal qualified payment stablecoin issuers, certain state qualified issuers, and foreign stablecoin issuers operating in the United States.

Comptroller of the Currency Jonathan V. Gould said in a statement:

One to One Reserves and Fast Redemption

A key component of the proposal is the requirement for at least one to one backing with identifiable and highly liquid assets. Issuers would need to maintain reserves that match the full value of outstanding payment stablecoins.

The rule would also require issuers to redeem stablecoins at par within two business days, reinforcing consumer protection and confidence in the system.

Capital and liquidity requirements would be determined on a case by case basis, depending on each issuer’s risk profile. The OCC also calls for a robust, principles based risk management framework that addresses operational resilience, third party exposure, and cybersecurity risks.

Proposal Draws Clear Line on Stablecoin Yield

One of the most closely watched elements of the proposal is its treatment of stablecoin yield.

Under the draft, OCC supervised entities would be prohibited from paying any form of interest or yield in connection with holding, using, or retaining a payment stablecoin. This restriction would apply whether compensation is paid in cash, tokens, or other forms of consideration.

The proposal introduces a rebuttable presumption that issuers are violating the rule if they pay yield to an affiliate or related third party that then passes yield to stablecoin holders. The OCC states that such structures would be highly likely to evade the statutory ban.

However, the draft makes clear that merchants may independently offer discounts for stablecoin payments, and issuers may share profits in certain non affiliate partnership arrangements.

Effective Date and Broader Regulatory Coordination

The GENIUS Act will take effect on the earlier of 18 months after enactment in July 2025 or 120 days after primary federal regulators finalize implementing regulations. That timeline could put the effective date as early as January 18, 2027.

The OCC’s effort is part of a coordinated rulemaking process alongside the Federal Reserve, the Federal Deposit Insurance Corporation, and the National Credit Union Administration.

The agency is accepting public comment for 60 days following publication of the proposal.

CoinLaw’s Takeaway

In my view, this proposal makes one thing very clear. GENIUS compliant stablecoins are being positioned as tightly regulated, bank like instruments. The one to one reserve rule and strict redemption timeline are designed to build trust. At the same time, the clear ban on yield draws a hard regulatory boundary.

In my experience covering digital asset regulation, yield has always been one of the most controversial pieces of the puzzle. By addressing it directly at the issuer level, the OCC is removing ambiguity. I found that this move could reshape how exchanges and fintech firms design their stablecoin products going forward.

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