OCC Unveils First U.S. Payment Stablecoin Issuer Rules Under GENIUS Act

TLDR

• OCC issued its stablecoin proposal on February 25 and comments close on May 1, 2026.

• Issuers would need reserves that always equal or exceed outstanding stablecoin value.

• The proposal sets a redemption deadline of no more than two business days.

• De novo issuers would face capital rules and a backstop tied to 12 months of expenses.

The Office of the Comptroller of the Currency has released the first federal proposal for payment stablecoin issuers in the United States. The draft rule builds the framework required by the GENIUS Act and will shape how issuers operate when the law takes effect.

Federal Scope and Issuer Obligations

The proposal applies to entities that fall under OCC authority and manage payment stablecoins. These include national banks, federal savings associations, some foreign bank branches, federal qualified payment stablecoin issuers, and state issuers that meet the Act’s requirements.

The OCC states that the rule creates a shared base for oversight as the market grows.

The proposal confirms that a payment stablecoin is a digital asset that an issuer must redeem at a fixed value. It also states that no person may issue a payment stablecoin in the United States without proper licensing. The OCC notes that this rule meets the GENIUS Act’s mandate to set a national structure for this activity.

Operational Limits and Prohibited Practices

The rule permits four core activities: issuing stablecoins, redeeming them, managing reserves, and providing custody. Issuers may also conduct limited support activities if they help maintain these functions. The OCC explains that other actions fall outside this scope.

The draft rule bars issuers from paying interest or yield to holders. The OCC adds a presumption of violation when a related third party pays yield under an arrangement with the issuer.

“This measure prevents indirect rewards that act like interest,” the agency states in the proposal. Issuers also may not suggest that their stablecoins are backed by the U.S. government.

Reserve, Liquidity and Redemption Requirements

Issuers must hold one-to-one reserve assets that match outstanding stablecoins. These reserves must be separate from other assets and held with an eligible institution. The permitted assets include U.S. currency, demand deposits, short-term Treasury securities, overnight repos backed by such securities, and certain tokenized versions of these instruments.

The OCC offers two choices for reserve diversification: a principles-based option and a set of fixed limits. Both options require daily and weekly liquidity and a maximum weighted average maturity of 20 days. Issuers with more than $25 billion outstanding would hold part of their reserves at insured banks or credit unions.

Issuers must redeem stablecoins within two business days. A clear redemption policy must be posted online, and any fee changes require seven days’ notice. The rule includes an automatic extension mechanism for stressed periods so that issuers can sell assets in an orderly manner.

Capital, Backstop and Custody Standards

New issuers must maintain at least $5 million in capital, and the OCC may raise this amount based on risk. Qualifying capital must meet existing OCC definitions and focus on tier 1 instruments. After the early period ends, each issuer must reassess its needs and adjust levels as required.

Issuers must also hold an operational backstop equal to the past year of expenses. These funds must be separate from reserves and capital assets. If capital or backstop levels fall short for two quarters, the issuer must stop net new issuance and begin an orderly wind-down.

The proposal sets minimum rules for custody of stablecoins, reserves, and private keys. Custodians must show control of tokenized assets and protect customer assets from creditor claims. They may use sub-custodians if they meet defined conditions.

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