On February 25, the Office of the Comptroller of the Currency (OCC) released a 376‑page notice of proposed rulemaking (NPRM) to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act for entities under its jurisdiction. The proposed rule would create a comprehensive framework for “payment stablecoin” issuers supervised by the OCC, foreign payment stablecoin issuers accessing the U.S. market, and certain custody activities by OCC‑regulated banks. The NPRM was published in the Federal Register on March 2, with the 60-day comment period ending on May 1, 2026. The NPRM also poses more than 200 specific questions for public comment on definitions, activities, reserves, liquidity, and other key design choices.

The proposed rule is lengthy, highly technical, and only one part of the broader GENIUS Act implementation effort by federal agencies, as explained below.

Background

Congress enacted the GENIUS Act (the Act) in July 2025 to establish a unified federal framework for “payment stablecoins,” i.e., digital assets designed for payments and redeemable at par. Among other things, the statute:

• Defines “payment stablecoin” and “permitted payment stablecoin issuer.”
• Restricts who may issue payment stablecoins in the U.S.
• Requires 1:1 high‑quality, liquid reserves backing outstanding stablecoins.
• Assigns primary regulatory responsibility among federal “payment stablecoin regulators” (including the OCC, Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and other agencies) and preserves state consumer protection laws while preempting certain state licensing and visitorial requirements.

The OCC’s proposed rule is only one piece of the overall federal regulatory regime to implement the GENIUS Act. In 2025, the Treasury Department issued an advance notice of proposed rulemaking, and the FDIC proposed application requirements for FDIC-supervised insured depository institutions (including state nonmember banks) seeking to issue stablecoins through subsidiaries. The Treasury has since followed with a notice of proposed rulemaking (April 2026) establishing broad-based principles for determining when a state-level regulatory regime is “substantially similar” to the federal framework under GENIUS Act § 4(c); comments are due June 2, 2026. On April 10, 2026, the FDIC issued a separate NPRM on prudential requirements for FDIC-supervised permitted payment stablecoin issuers and the deposit-insurance treatment of stablecoin reserves (comments due June 9, 2026). On the same date, the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) jointly issued a separate NPRM on Bank Secrecy Act (BSA), anti-money laundering (AML), and OFAC sanctions-compliance obligations for stablecoin issuers (comments due June 9, 2026).

Under the GENIUS Act, the OCC will have regulatory or enforcement authority over several categories of issuers and service providers, including subsidiaries of national banks and federal savings associations approved to issue payment stablecoins, “Federal qualified payment stablecoin issuers” (including certain uninsured national banks and federal branches), and certain state‑chartered issuers when the Act gives the OCC explicit regulatory or enforcement authority. It will also regulate foreign payment stablecoin issuers that meet statutory criteria to access U.S. customers.

Highlights of the OCC Proposed Rule

The NPRM is organized into a new 12 C.F.R. part 15, and it begins with a detailed set of definitions and scope provisions. The proposed rule includes standards and requirements related to activities; reserve assets; redemption; risk management; audits, reports and supervision; state qualified payment stablecoin issuers transitioning to the federal regulatory framework; and custody services. The NPRM also provides standards and requirements relevant to applications and registrations for permitted payment stablecoin issuers subject to the OCC’s jurisdiction; examination and supervision of foreign issuers; revocation or rescission of approval of a permitted payment stablecoin issuer in certain instances; and capital and operational backstops. The proposed rule also revises the OCC’s capital standards (12 C.F.R. part 3), prompt corrective action regulations (12 C.F.R. part 6), assessment of fees (12 C.F.R. part 8), and the OCC’s rules of practice and procedure (12 C.F.R. part 19).

While the proposed rule largely hews to the statutory text of the GENIUS Act and many provisions should not be controversial, several themes stand out:

• The proposed rule reflects several interpretive choices by the OCC that warrant attention from market participants. As discussed below, these include the OCC’s narrower definition of its direct supervisory reach, its strict reading of what qualifies as a “payment stablecoin,” and its rebuttable presumption against affiliate and third-party yield arrangements that goes beyond the GENIUS Act itself.
• The proposed rule carefully defines its jurisdictional reach. This is narrower than the GENIUS Act’s universe of “permitted payment stablecoin issuers” but captures the entities the OCC can directly regulate or examine, while also limiting the agency’s core permissible activities largely to stablecoin issuance, redemption, reserve management, and custody or safekeeping. The proposed rule would prohibit permitted issuers from drawing on reserve assets for other purposes.
• The OCC proposes to implement the Act’s definition of “payment stablecoin” largely as written. The OCC emphasizes that only digital assets subject to a legal redemption obligation at par qualify as payment stablecoins, which is designed to exclude many algorithmic or non‑redeemable tokens.
• The proposed rule addresses several “self‑executing” provisions of the GENIUS Act without codifying them in detail. The Act assigns the OCC exclusive visitorial and supervisory authority over federal qualified payment stablecoin issuers; preempts duplicative state licensing requirements for such issuers and certain OCC‑regulated subsidiaries; and preserves state consumer protection laws. The OCC views these provisions as self‑executing but expressly invites comment on whether they should be codified in OCC regulations for clarity.
• The NPRM builds out the reserve and custody framework that is central to the GENIUS Act. Among other things, it would: require permitted payment stablecoin issuers under OCC oversight to maintain reserve assets whose fair value equals or exceeds the outstanding issuance value of their payment stablecoins at all times; specify what qualifies as a “reserve asset,” including central bank money, certain short‑dated U.S. Treasuries and government money market funds, high‑quality deposits or insured shares, and specified repo and reverse‑repo structures; define “eligible financial institutions” that may custody reserves, including OCC‑supervised institutions and other regulated entities that meet detailed § 10 criteria; and impose diversification and concentration limits on reserve holdings, with options for principles‑based requirements plus an explicit safe harbor or mandatory quantitative limits across all issuers. The proposed rule would also require full segregation of stablecoin reserve assets from the issuer’s own assets and robust recordkeeping to support traceability and rapid monetization of reserves.
• The proposed rule covers redemption and liquidity expectations. The OCC would require “timely” redemption of payment stablecoins at par, generally within two business days under normal conditions, with the possibility of a longer timeframe in stress scenarios involving very large redemption volumes. The rule contemplates liquidity planning, composition and concentration of reserve assets, and ongoing reporting on reserve composition, tenor, and location, supported by monthly examinations of reserve disclosures by a registered public accounting firm. For larger issuers (e.g., with more than $50 billion of stablecoins outstanding), the GENIUS Act also requires annual audited financial statements. Separately, the OCC is considering an 18- to 36-month full-scope examination cycle for some smaller issuers, by analogy to bank examination frequency.
• The NPRM touches on conduct, disclosures, and preemption boundaries. The OCC proposes prohibitions on deceptive naming, marketing, or representations that could imply that payment stablecoins are legal tender, U.S. government obligations, or insured deposits. It also acknowledges the statutory prohibition on paying “interest or yield solely in connection with the holding or use” of payment stablecoins and requests extensive comment on how to prevent evasion, including through affiliated or third‑party arrangements. The proposed rule would treat certain affiliate or third‑party arrangements that are designed to replicate yield as presumptively inconsistent with the interest ban, subject to rebuttal, and makes clear that other structures not captured by that presumption may still be found to violate or evade the prohibition on a case‑by‑case basis.
• The NPRM describes an application and licensing framework for entities seeking to become federal qualified payment stablecoin issuers, including nonbank entities, uninsured national banks, and federal branches. It also signals that capital and risk‑management requirements will be tailored to the stablecoin business model, including operational risk, technology risk, and liquidity risk, with more detail in the later subparts of part 15. The OCC indicates that, at least initially, capital requirements for permitted issuers — especially nonbanks and bank subsidiaries — would be set through individualized evaluations focused primarily on operational risk. The proposed rule would also clarify that the Act’s 120‑day deadline for acting on issuer applications begins only once an application is “substantially complete,” and it outlines how large state‑licensed issuers must transition to federal oversight when their outstanding issuance exceeds $10 billion, including a five‑calendar-day notification requirement, potential waivers to remain under state supervision, and an OCC examination within six months of transition.

Our Take

For OCC‑regulated banks, the proposed rule accomplishes several objectives. It validates a path for bank‑connected and OCC‑chartered stablecoin issuers by defining categories like “federal qualified payment stablecoin issuer” and identifying circumstances in which a bank subsidiary can serve as the issuer. It also articulates the OCC’s view that these entities will be supervised like other prudentially regulated financial institutions, with capital, liquidity, governance, and compliance regimes adapted to the specific risks of distributed ledger technology.

At the same time, the NPRM underscores that this is not a light‑touch regime. The reserve, diversification, and reporting requirements are detailed and will be operationally demanding, particularly for issuers with large outstanding stablecoin balances or global customer bases. The OCC is also clearly focused on spillover risk to the banking system, including how large stablecoin reserve balances may affect deposit markets, Treasury markets, and liquidity regulation for depository institutions. On the contested question of stablecoin yield, the OCC’s approach goes beyond the statute itself: the proposed rebuttable presumption against affiliate and third-party yield arrangements is the most aggressive position the OCC could have taken within its NPRM, and signals that the agency is actively trying to prevent issuers from working around the yield ban through indirect arrangements.

For nationally chartered banks that do not plan to issue stablecoins themselves, this rulemaking still matters. Many banks will be “eligible financial institutions” for reserve custody purposes or will provide payment, settlement, or liquidity services to stablecoin issuers. The OCC is signaling that it expects careful due diligence, formal custody agreements that incorporate GENIUS Act standards, and thoughtful management of concentration, operational, and liquidity risk associated with stablecoin‑related deposits and securities.

As noted above, the OCC’s NPRM is only part of the federal regulatory picture. For example, critical questions about BSA/AML compliance, sanctions screening, and information‑sharing are addressed in the separate FinCEN/OFAC NPRM discussed above.

Looking ahead, while this rulemaking is underway, the ongoing dispute between traditional banks and the crypto industry over stablecoin yield payments has threatened the Senate’s passage of the CLARITY Act bill, which passed the House last summer. The Senate is currently negotiating the stalemate with a proposed compromise to ban passive interest on stablecoin holdings while allowing active rewards for payments or usage. Accordingly, the CLARITY Act, if enacted, could alter or limit the OCC’s authority under the GENIUS Act to issue rules further restricting yield payments.