The Office of the Comptroller of the Currency (OCC) dropped a notice of proposed rulemaking to implement the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) on Feb. 25. The OCC proposes requirements for stablecoin reserves, redemption and risk management, in addition to licensing and capitalization requirements for permitted payment stablecoin issuers.
Enacted on July 18, 2025, the GENIUS Act is Congress’ first comprehensive federal framework for payment stablecoins, making the issuance of payment stablecoins a regulated activity in the United States. This means there are no more gray areas for stablecoins. To sell, you must either be a “permitted payment stablecoin issuer” or receive them from one. The question is, will your institution be ready to implement the changes?
The OCC’s Proposal
We’re operating in a rapidly evolving stablecoin landscape. Stablecoin tokens currently hold over $300 billion in market capitalization. The OCC proposal would establish new regulations covering OCC-supervised stablecoin issuers and related custody activities. The proposed rule covers a range of issues.
Scope
While the Federal Reserve and Federal Deposit Insurance Corp. (FDIC) maintain supervisory roles for stablecoin issuers that are subsidiaries of state-chartered banks, the GENIUS Act places the OCC in a special role. The scope provision lists national banks and their subsidiaries, federal savings associations and their subsidiaries, federal branches and their subsidiaries, foreign stablecoin issuers, nonbank entities seeking to be federally qualified stablecoin issuers and state-qualified issuers exceeding $10 billion all under the OCC’s supervision.
Interest, Yield and Rewards
Permitted issuers may not pay any form of interest or yield solely for holding, using or retaining a stablecoin. But it’s not limited to direct payments. White‑label arrangements and affiliate relationships also create a rebuttable presumption that payments to holders violate this rule. The OCC is clear: stablecoins are cash-like instruments, not investment products.
Reserve Assets
Every payment stablecoin must be fully backed. Issuers must hold identifiable, segregated, high-quality liquid assets with a fair market value equal to outstanding issuance at all times. Permissible assets include Fed balances, insured deposits, short-dated Treasuries, qualifying repurchase agreements and government money market funds. The OCC proposes two options for diversification:
- Principles-based liquidity with a safe harbor if issuers keep at least 10% daily liquidity, 30% liquidity within five days and no more than 40% exposure to any single institution.
- Mandatory daily limits that immediately trigger a halt to new issuances until cured.
Additionally, your CEO or chief financial officer must certify monthly reserve accuracy to the OCC.
Redemption
Issuers must redeem stablecoins at par value within two business days. If redemptions exceed 10% of outstanding issuance in a 24 hour period, the timeline extends to seven days, and the OCC must be notified.
Risk Management
The OCC proposes principles-based operational and risk management standards specifically tailored to stablecoin activities. The proposed requirements related to the custody of stablecoin reserves include segregation and non-commingling of covered customers assets, prudent use of omnibus accounts subject to robust controls and self-custody hardware/software exclusion when no custodial claims are made.
Capital
During a three-year de novo period, issuers must maintain minimum capital subject to a floor of $5 million. After the de novo period, all issuers must maintain liquid assets equal to 12 months of total operating expenses, held separately from reserves. If you fail to meet the capital requirements for back-to-back quarters, mandatory liquidation of reserve assets and redemption of outstanding stablecoins is triggered.
Bottom Line
The rule touches everything from product strategy to capital planning. The OCC seeks comments on all aspects of its proposal due 60 days after Federal Register publication. Institutions should assess how their operations align with proposed reserves, redemption, diversification, reporting and capital requirements. Now is the window to shape the final rule. Prospective and state‑licensed issuers nearing $10 billion should map their operations against the proposed standards and be ready for implementation. The GENIUS Act is here, and the OCC is set to act.