12 minute read | February.26.2026
The Office of the Comptroller of the Currency (OCC) released a notice of proposed rulemaking to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The OCC proposes requirements for stablecoin reserves, redemption and risk management, in addition to licensing and capitalization requirements for permitted payment stablecoin issuers subject to the OCC’s jurisdiction.
As we noted in our prior client alert, “Stablecoin Framework Signed into Law,” the GENIUS Act provides federal, state and foreign paths for payment stablecoin issuance and tasks agencies with core rulemaking. The OCC proposal would establish a new Part 15 of Title 12 of the Code of Federal Regulations covering OCC‑supervised stablecoin issuers and related custody activities. It also states that Bank Secrecy Act and sanctions compliance standards will be addressed in a separate proposed rule. In parallel, the FDIC has issued a proposed rule related to certain application provisions under the GENIUS Act.
The proposal would apply to stablecoin activities conducted by entities within the OCC’s jurisdiction, as well as foreign issuers operating in the United States under the Act’s foreign pathway. The scope provision lists national banks and their subsidiaries, Federal savings associations and their subsidiaries, Federal branches and their subsidiaries, foreign payment stablecoin issuers, nonbank entities seeking or holding status as Federal qualified payment stablecoin issuers, and certain State-qualified issuers for which the OCC has regulatory or enforcement authority (proposed § 15.1; proposed § 15.2). The transition mechanics applicable to State-qualified issuers that exceed the $10 billion threshold are discussed below.
The reserve regime is prescriptive and daily in its application. Issuers must maintain identifiable, segregated reserve assets, with a total fair value that equals or exceeds outstanding issuance value at all times, and must be able to access and monetize those reserves commensurate with their risk and business model (proposed § 15.11(a)).
Permissible reserves are limited to high‑quality liquid assets, as enumerated in the proposal. These include U.S. currency or Federal Reserve balances; demand deposits or insured shares at insured depository institutions, subject to any FDIC or NCUA limits adopted under the Act; short‑dated U.S. Treasuries with 93 days or less remaining maturity; overnight repos and reverse repos meeting 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 (proposed § 15.11(b)).
To implement statutory diversification requirements, the OCC proposes two alternative approaches, and seeks public comment on which approach should be implemented:
Monthly reserve composition reports must be posted by noon on the last day of each month for the prior month‑end. A registered public accounting firm must examine the prior month‑end report on the same timeline. The CEO and CFO must submit a monthly accuracy certification to the OCC (proposed § 15.11(e)–(f)). A shortfall in reserve assets triggers an immediate halt to net new issuance until cured, with further remedial measures specified in the rule (proposed § 15.11(g)).
Issuers must publish a redemption policy and redeem payment stablecoins at par within two business days of a valid request, subject to limited regulator‑imposed extensions (proposed § 15.12(a)–(b)). If redemption requests exceed 10 percent of outstanding issuance value in any rolling 24‑hour period, the redemption timeline automatically extends to seven calendar days for all outstanding and subsequent requests during that period; the OCC may determine that the issuer can redeem sooner in an orderly and fair manner. The issuer must notify the OCC within 24 hours of crossing the threshold (proposed § 15.12(c)(1)–(4)).
Issuers must provide clear, conspicuous purchase and redemption disclosures, including 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 reflected on the issuer’s website and in customer agreements (proposed § 15.12(d)).
Permitted payment stablecoin issuers must not pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens or other consideration) solely in connection with the holding, use or retention of such payment stablecoin (proposed § 15.10(c)(4)). 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. Issuers may rebut this presumption by written submission demonstrating that the arrangement is not prohibited and is not an evasion (proposed § 15.10(c)(4)). The proposal also codifies the statutory limits on pledging, rehypothecating or reusing reserve assets, with narrow exceptions, and includes an express anti‑evasion provision (proposed § 15.10(c)(5)–(6)). As framed, the prohibition channels permitted payment stablecoins to operate as cash‑like or stored‑value instruments rather than deposit or investment products.
The OCC proposes principles‑based operational and risk management standards tailored to stablecoin activities. The standards cover internal controls and information systems, internal audit, interest‑rate risk management, oversight of insider and affiliate transactions, third‑party risk oversight, and incident notification for sensitive customer information, including private keys (proposed § 15.13(a)–(b)).
The proposed requirements related to the custody of stablecoin reserves and other covered assets address segregation and operational requirements, including:
The OCC would conduct full‑scope examinations at least every 12 months, with authority to set an 18–36 month cycle for qualifying smaller issuers that meet specified conditions. More frequent exams remain at the OCC's discretion (proposed § 15.14(a), (d)–(e)).
Issuers must file confidential weekly reports in a manner and form specified by the OCC, and standardized quarterly financial condition reports within 30 days of quarter‑end. Upon request, issuers must submit reports on financial condition, risk systems, compliance with the Act and Part 15, and BSA/sanctions compliance (proposed § 15.14(h)–(j)). Within 180 days after approval, and annually thereafter, the board must certify that AML and sanctions programs are reasonably designed consistent with the Act (proposed § 15.14(k)).
Issuers with more than $50 billion in outstanding issuance value that are not reporting companies under the Exchange Act must prepare GAAP‑compliant annual financial statements, audited by a registered public accounting firm, post them publicly, and file them with the OCC within 120 days after fiscal year‑end (proposed § 15.14(l)).
Regulatory capital would consist of two elements only: common equity tier 1 capital and additional tier 1 capital (e.g., common stock and qualifying noncumulative perpetual preferred stock). The OCC does not propose a tier 2 capital element for permitted issuers.
Failure to meet capital or backstop requirements at quarter‑end bars new issuance until cured. Failure for two consecutive quarter‑ends triggers mandatory liquidation of reserve assets and redemption of outstanding stablecoins without customer fees and a prohibition on new issuance (proposed § 15.41(c)).
Federal track. Insured national banks, Federal savings associations and insured Federal branches seeking to issue through a subsidiary, and nonbanks, uninsured national banks and uninsured Federal branches seeking to issue as Federal qualified issuers, must apply and obtain OCC approval (proposed § 15.30(a)). The OCC must notify applicants within 30 days whether an application is “substantially complete” (proposed § 15.30(b)–(e)). A substantially complete application is deemed approved on the 120th day after the OCC receives it, unless the OCC denies the application (proposed § 15.30(b)(5)).
Foreign track. The Secretary of the Treasury must first determine that the home jurisdiction’s regime is “comparable” to the Act; a registrant then files with the OCC, and registration is deemed approved on day 30 unless the OCC rejects it (proposed § 15.31–§ 15.32). Registered foreign issuers must accede to OCC supervision, provide reports comparable to those of permitted issuers (with potential exemptions at OCC discretion), and meet reserve, redemption and interest‑prohibition standards for U.S. customers (proposed § 15.31(b)–(c)).
State track. A nonbank State qualified issuer that crosses $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 until back below the threshold. The rule requires a capital analysis within 270 days and an initial OCC examination within six months after the issuer's compliance notification under § 15.15(b)(4)(i). A waiver process is available (proposed § 15.15(b)–(d)).
The OCC requests comment on all aspects of the proposal, including reserve composition and diversification, redemption mechanics, custody practices, reporting and examination cadence, capital and the operational backstop, state transition, and unusual and exigent circumstances. The agency also proposes conforming amendments to OCC capital, assessment and adjudicatory rules to reflect the new framework and to avoid duplicative assessments tied to required reserve assets. Comments are due 60 days after publication in the Federal Register.
Current issuers should map existing operations to the proposed reserve, redemption, diversification, reporting, capital/backstop and application standards, and consider submitting data‑driven comments on operational feasibility and risk calibration; prospective entrants should perform the same mapping for planned operations. For state‑licensed issuers nearing the $10 billion threshold, early planning for the 360‑day transition or a waiver request is prudent (proposed § 15.15(b)–(d)).
We will continue to track developments, including the OCC’s separate rulemaking on BSA/AML and sanctions, and the FDIC’s GENIUS Act application‑related rulemaking. For questions about the proposed rule or to discuss how it may affect your operations, please contact a member of our team.