OCC Lays Out Framework for Regulated Stablecoins Under GENIUS Act

The Office of the Comptroller of the Currency on Wednesday proposed rules to implement the GENIUS Act, laying out how payment stablecoins would be issued and supervised under the agency’s jurisdiction.

In a notice of proposed rulemaking issued Wednesday, the OCC said it is launching a 60-day public comment period to determine how payment stablecoins are issued, backed, supervised, and potentially shut down under federal oversight.

Wednesday’s move aims to operationalize the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, the first federally established stablecoin framework that passed into law last July.

The law generally prohibits anyone other than a “permitted payment stablecoin issuer” from issuing a payment stablecoin in the U.S. and bars digital asset service providers from offering non-compliant stablecoins to U.S. users.

“The regulations effectively bring the industry into the traditional finance world with significant oversight and connectivity with the banking industry,”  Musheer Ahmed, founder and managing director of Finstep Asia, told Decrypt.

The U.S. market is expected to see a host of “regulated stablecoins from non-banks, payments, and crypto institutions” for “tokenized TradFi use cases.” 

The OCC’s draft covers reserve asset standards, mandatory redemption at par, liquidity and risk management controls, audits, supervisory examinations, custody requirements, and application pathways for new issuers. 

It also introduces a “capital and operational backstop” and amends existing capital adequacy and enforcement rules.

The agency said it “will have regulatory or enforcement authority over certain permitted payment stablecoin issuers,” including subsidiaries of national banks and federal savings associations, Federal qualified payment stablecoin issuers, and certain State qualified issuers. 

“In addition, the OCC will have regulatory authority over foreign payment stablecoin issuers,” the proposal says, an expansion that could pull offshore issuers seeking U.S. access into federal oversight.

Notably absent are Bank Secrecy Act and sanctions rules, which the OCC said will be addressed separately with the Treasury Department.

The new stablecoin regime is expected to kick in no later than January 2027, but could begin as soon as 120 days after regulators finalize implementing rules, shortening the transition window if rulemaking moves faster than the statutory 18-month deadline.

Last August, the banking groups wrote to Congress demanding closure of “several loopholes” in the GENIUS Act, warning that third-party yield offerings on stablecoins could still trigger major deposit flight.

OCC Chief Jonathan Gould has previously dismissed fears of a sudden deposit crisis, telling ABA conference attendees in October that any material deposit flight “would not happen in unnoticed fashion” and “would not happen overnight.”

To that end, Ahmed said regulated stablecoins could be “potentially safer than traditional banks” in stress events, noting banks operate on 10–20% capital ratios while stablecoin issuers are mandated to hold 100% reserves for 1:1 redemptions, making them “fairly solvent” if rules are maintained.

In an extreme market scenario, Ahmed said, “one could say that the lender of the last resort will be the U.S. Fed,” not by directly backstopping issuers, but by “supporting the underlying assets that form stablecoin reserves — largely US treasuries and cash equivalents.”