On February 25, 2026, the Office of the Comptroller of the Currency published a notice of proposed rulemaking that translates the GENIUS Act into operational requirements for institutions that want to issue payment stablecoins. The proposal, codified primarily in a new 12 CFR Part 15, establishes the licensing framework, reserve standards, and supervisory expectations that will govern stablecoin issuance by nationally chartered banks and qualified nonbank issuers.
The rule arrives seven months after President Trump signed the GENIUS Act into law on July 18, 2025, following a bipartisan Senate vote of 68 to 30. The legislation set a deadline: final regulations must be issued within 18 months of enactment, or the Act takes effect automatically by January 18, 2027. The OCC’s February proposal puts the agency ahead of that clock, signaling urgency in establishing a regulatory perimeter before market participants begin issuing without clear guardrails.
What the Proposed Rule Requires
The framework addresses five core areas. First, reserve requirements: issuers must maintain one-to-one backing of every stablecoin in circulation with qualifying assets, which the proposal defines as US Treasury securities, central bank reserves, and certain high-quality liquid assets. Reserves must be segregated from the issuer’s operating funds and held in custody arrangements that survive the issuer’s insolvency.
Second, the prohibition on yield. The proposed rule explicitly bars stablecoin issuers from paying interest or distributing yield to holders, preserving the distinction between payment stablecoins and securities. This provision directly addresses the regulatory ambiguity that previously surrounded yield-bearing stablecoins and removes them from the OCC’s licensing pathway.
Third, redemption standards. Issuers must honor redemption requests at par value in US dollars within one business day, with the proposal seeking comment on whether same-day redemption should be mandatory for all issuers or only those above certain thresholds.
Fourth, capital and risk management. The proposal introduces capital adequacy requirements calibrated to the issuer’s scale and complexity, along with mandatory risk management frameworks covering operational, liquidity, and technology risks. These requirements mirror existing bank-like prudential standards, suggesting the OCC views stablecoin issuers as functionally equivalent to narrow banks.
Fifth, licensing pathways. National banks can issue stablecoins directly through their existing charters. Nonbank entities must apply for a Federal Qualified Payment Stablecoin Issuer designation, a new category created by the GENIUS Act that places them under OCC supervision without requiring a full bank charter.
Why This Matters for Banking Strategy
The proposal creates the first clear on-ramp for traditional banks to enter stablecoin issuance under federal supervision. Previously, banks faced regulatory uncertainty about whether issuing stablecoins required separate approval, how reserves should be treated on balance sheets, and what capital charges applied. The proposed rule answers each question explicitly.
For the existing stablecoin market, dominated by Tether and Circle, the implications are competitive. Both operate under state-level or offshore frameworks. The OCC’s proposal does not grandfather existing issuers. Any entity, including Circle with its USDC, must apply for and receive OCC licensure or state-equivalent approval to continue operating as a permitted payment stablecoin issuer once final rules take effect.
The FDIC published a parallel proposal on April 10, 2026, covering stablecoin issuance by state-chartered insured depository institutions. Together, the OCC and FDIC rules create a comprehensive federal framework that covers virtually every banking entity type in the US system.
Market Reactions and Open Questions
The banking industry’s initial response has focused on the capital treatment of reserves. If stablecoin reserves receive zero risk-weight treatment, similar to US Treasuries held outright, the economics of issuance become attractive for large banks with existing Treasury operations. If reserves carry any capital charge, the margin compression could make issuance uneconomic for all but the largest institutions.
The comment period, which the OCC set for 60 days, also invites input on interoperability standards, the treatment of stablecoins issued on public versus permissioned blockchains, and the supervisory framework for foreign issuers operating in US markets.
For financial services executives, the proposed rule marks the transition of stablecoins from a crypto-native experiment to a regulated banking product. The infrastructure decisions made in the next 12 months, from blockchain selection to custody architecture, will determine which institutions capture the payments volume that stablecoins are positioned to intermediate.
Related: Stablecoin Regulation Gains Substance as BIS Issues Framework | Visa Expands Stablecoin Settlement to Nine Blockchains
