OCC finalizes GENIUS Act stablecoin rules

On October 21, 2026, the Office of the Comptroller of the Currency (the OCC) issued a 721-page final rule (the Final Rule) implementing certain provisions of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act), which was enacted July 18, 2025. Codified principally as a new 12 C.F.R. Part 15 (Part 15), the Final Rule sets the licensing, reserve, redemption, capital, risk management, and reporting requirements governing “permitted payment stablecoin issuers” (PPSIs) subject to OCC jurisdiction, with conforming amendments to the OCC’s capital, prompt corrective action, and assessment rules. The OCC received 328 comments on its February 2026 proposed rule (the Proposed Rule).

The Final Rule addresses all of the regulations the OCC is required to promulgate under the GENIUS Act other than those related to the Bank Secrecy Act (BSA), anti-money laundering (AML), and Office of Foreign Assets Control sanctions, which will be addressed in a separate rulemaking in coordination with the Department of the Treasury. Concurrent with the Final Rule, the OCC also issued OCC Bulletin 2026-51 providing guidance on filing applications and requesting waivers under the GENIUS Act and OCC Bulletin 2026-52 regarding reporting forms for PPSIs. The Final Rule and the GENIUS Act both take effect January 18, 2027.

Scope and who is covered

Part 15 governs the issuance and custody of payment stablecoins by national banks, federal savings associations, federal branches, and their subsidiaries, foreign stablecoin issuers, nonbanks seeking federal qualified payment stablecoin issuer status, and state qualified payment stablecoin issuers subject to OCC authority. A “payment stablecoin” is a digital asset used or designed for payment or settlement that the PPSI must convert, redeem, or repurchase for a fixed amount of monetary value and that the PPSI represents as maintaining a stable value, which the OCC reads to require redemption at par. The definition excludes national currency, deposits (including tokenized deposits), and securities. The Final Rule clarifies that a stablecoin that is redeemable for a payment stablecoin rather than monetary value, i.e., a “wrapped” stablecoin, would not itself be a payment stablecoin. Technology providers fall outside the rule unless they issue payment stablecoins within a covered category or act as covered custodians.

The yield prohibition and removal of the rebuttable presumption

The most controversial provision of the GENIUS Act bars a PPSI from paying a holder any form of interest or yield solely in connection with holding, using, or retaining the stablecoin. The dispute over the prohibition on yield between the banking and cryptocurrency industries led to the failure to pass the CLARITY Act earlier this year. The Final Rule codifies the prohibition on yield, which applies equally to retail and institutional holders and to registered foreign PPSIs, with one significant change.

The Proposed Rule would have presumed a violation where a PPSI had an arrangement to pay yield to an affiliate or “related third party” (e.g., a yield-as-a-service provider or white-label partner) and that party in turn had an arrangement to pay yield to holders of the PPSI’s stablecoins. The Final Rule eliminates this presumption. The OCC reasoned that the market for payment stablecoins is nascent, that the presumption could be both overinclusive and underinclusive, and that rebuttal would impose a burden without commensurate benefit. The OCC stated that it will instead monitor arrangements through supervision and act against violations and evasion.

Uncertainty remains. The OCC declined to define “interest,” “yield,” “pay,” “holding,” “use,” or “retention,” saying it will look to economic substance because “interest does not stop being interest merely because it is given a different name.” There is no de minimis exemption, no grandfathering of pre-GENIUS Act rewards programs, and no safe harbor for white-label partners, decentralized finance, or service payments. The OCC clarified that payments made through an agent are prohibited, that payments for bona fide services generally are not, absent contrary facts, and that interest on deposits, including tokenized deposits, falls outside the prohibition. The OCC expects to issue guidance as it identifies violations and, with more experience, to propose a rulemaking clarifying the yield prohibition. The treatment of exchange rewards programs remains unclear, and the CLARITY Act, which would have barred arrangements “functionally equivalent” to deposits, stalled after a failed cloture vote.

Reserve and liquidity requirements

Under the Final Rule, payment stablecoin reserves must be identifiable, segregated, and not commingled, and must at all times have a reserve asset value equal to or exceeding outstanding issuance. “At all times” means no intraday shortfalls; the OCC rejected requests to excuse settlement-timing gaps. The composition of permitted reserve assets remains generally the same under the Final Rule, including U.S. currency and Federal Reserve balances; demand deposits and share accounts at insured institutions; Treasury securities maturing in 93 days or less; overnight Treasury repurchase and reverse repurchase agreements, each meeting specified conditions; registered government money market funds holding only those assets; and tokenized forms of certain reserve assets. PPSIs may not pledge, rehypothecate, or reuse reserves except for repurchase margin, custodial services, or redemption liquidity.

The liquidity regime changed materially under the Final Rule. The Proposed Rule relied on 10% daily liquidity, 30% weekly liquidity, a 40% cap at any one eligible financial institution, a 50% cap on daily liquidity at any one institution, and a 20-day weighted average maturity limit. The Final Rule requires only that at least 5% of reserves be held in demand deposits, demand share accounts, or Federal Reserve balances, and caps any single counterparty at 40% of reserves, excluding the U.S. government, “appropriate custodians,” centrally cleared repurchase transactions, and directly held assets. The Final Rule drops the weekly test, maturity cap, and 50% sublimit in favor of principles: sufficiently diverse reserves, managed custodian concentration, and demonstrated capability to monetize reserves in normal and adverse conditions. PPSIs must hold a buffer above 100% where necessary and stress test regularly, including under significant positive interest-rate scenarios.

The Final Rule also makes two operational changes with respect to reserves. PPSIs may now withdraw excess reserves at any time after due diligence confirms no shortfall, rather than only monthly after certification. In the event of a shortfall in reserves, the PPSI must notify the OCC the same day and immediately halt new issuance, and after 15 consecutive business days must begin liquidation and redemption without fees.

National trust banks and uninsured national banks

Uninsured national banks, including national trust banks, and uninsured federal branches may issue payment stablecoins directly as federal qualified payment stablecoin issuers after approval by the OCC, whereas insured banks must use a subsidiary. The Final Rule further clarifies that a national trust bank PPSI must satisfy the requirements applicable to both a national bank and a PPSI, with its activities remaining trust operations or related activities. Broader activities do not permit evasion of the yield ban. 

Despite urging from certain commentators, the OCC declined to narrow trust bank activities, leaving the scope of permissible trust bank powers unchanged in the Final Rule. This discussion in the Final Rule is significant given the outstanding litigation filed by the Independent Community Bankers of America challenging the OCC’s rule regarding the powers of national trust banks, OCC Interpretive Letter 1176, and the OCC’s conditional approval of Protego Trust Bank, National Association. Since the passage of the GENIUS Act, the OCC has conditionally or finally approved over a dozen national trust bank charters focused on digital asset activities. Despite requests from commentators, the OCC declined to rescind prior trust bank approvals, reasoning that Congress’s inclusion of uninsured national banks in the federal qualified payment stablecoin issuer definition signals clear legislative intent that trust banks be able to issue payment stablecoins.

An uninsured national trust bank, whether or not it issues stablecoins, may elect to be subject to the Part 15 capital requirements in lieu of the OCC’s generally applicable capital rules. To make such an election, the bank must seek prior written approval of the OCC, which will grant or deny the application within 60 days. Reverting to capital treatment under 12 C.F.R. Part 3 requires only a notice to the OCC. 

Capital and operational backstop

The Final Rule contains significant revisions to minimum capital requirements for PPSIs, adopting a capital framework based on GAAP tangible equity rather than the common equity tier 1 and additional tier 1 capital framework set out in the Proposed Rule. Intangible assets and deferred tax assets are required to be deducted from capital. The OCC will set individualized minimum capital for a PPSI when approving its application, utilizing the factors set forth in OCC Bulletin 2007-21 that the OCC has long applied in determining the minimum capital for national trust banks. PPSIs are generally subject to a de novo period of three years, during which they are subject to a $5 million capital floor. An insured bank that consolidates financial statements with a PPSI must deconsolidate the PPSI and exclude the investment and receivables from its risk-weighted asset and leverage capital calculations.

PPSIs must also maintain an operational backstop of separately identified liquid assets equal to 12 months of total expenses, excluding one-time expenses with permission of the OCC. The amount of the PPSI operational buffer differs materially from the liquidity buffer of six months of expenses typically required for national trust banks, including in recent OCC approvals. The assets used for satisfying the operational buffer cannot also count toward a PPSI’s minimum capital requirement; the minimum capital and operational buffer are separate requirements. PPSIs may fund up to half of that amount with qualifying backstop debt. 

Under the Final Rule, PPSIs must comply with minimum capital and operational buffer requirements at all times rather than at quarter-end as set forth in the Proposed Rule. In the event a PPSI’s capital or operational buffer falls below the minimum required level, it must notify the OCC within 24 hours. The OCC may permit continued operations following use of the operational backstop to address a temporary disruption or other operational event, provided the PPSI submits a plan within seven days to restore the backstop within 90 days.

Waivers for existing stablecoin issuers

OCC Bulletin 2026-51 implements the GENIUS Act’s transition relief. An applicant with a pending, substantially complete application on or before January 18, 2027, may request a written waiver of the GENIUS Act’s and Part 15’s requirements for up to 12 months from that date. The OCC stated it generally expects to waive only the prior approval requirement, and only for existing stablecoin issuers already operating in the United States; the OCC indicated that it has identified no compelling, generally applicable reasons to waive other requirements, given that issuers have had 18 months to prepare. The OCC further stated that it has not identified compelling, generally applicable reasons to grant waivers for stablecoin issuers or prospective stablecoin issuers who are not currently operating or issuing stablecoins in the United States.

Other key requirements

Application process. The application set forth in the Final Rule is largely unchanged from the Proposed Rule. PPSI applicants must address the business plan, management, reserve assets, issuance and redemption processes, risk management, capital and liquidity, BSA/AML and sanctions, third-party and enterprise risk, compliance, and audit, as well as a new review criterion regarding whether the proposed structure adequately addresses run risk and ensures the ability to redeem payment stablecoins. Each proposed director, executive officer, and principal shareholder of the PPSI must submit an Interagency Biographical and Financial Report or Corporate Background and Financial Report. The OCC will notify applicants within 30 days whether a filing is “substantially complete” and render a decision on a PPSI application within 120 days after determining that the application is substantially complete.

Permitted PPSI activities. The Final Rule permits PPSIs to hold non-payment stablecoin digital assets as principal where necessary, including to pay customer fees or network “gas” fees. PPSIs are also allowed to establish trust arrangements for reserve assets and manage foreign exchange risk.

Redemption. A new provision defines when the redemption obligation begins: after a redemption order and successful onboarding, provided onboarding is designed not to unduly delay redemption. PPSIs must publicly disclose their redemption policy, including timeframes, methods, and any minimum redemption requirements, and must redeem any amount of one coin or more. Redemption must occur within two business days. The Proposed Rule would have automatically extended redemption to seven calendar days when requests exceeded 10% of outstanding issuance in 24 hours; commentators warned this could accelerate a run. The Final Rule instead requires notice to the OCC within 24 hours of crossing that threshold, with any extension at the OCC’s discretion.

Monthly reserve reporting and certification. By noon on the last day of each month, PPSIs must publish prior month-end reserve composition in template format: total outstanding coins, the amount and composition of reserves, and average tenor and location of custody by category, reported at the brand level. A registered public accounting firm must examine the report, which must be published simultaneously, and the CEO and CFO must certify the report monthly to the OCC.

Risk management. Requirements are principles-based and scaled to size and complexity, covering internal controls, interest rate risk, asset growth, earnings, insider and affiliate transactions, third-party due diligence, liquidity and concentration, monetization and stress testing, and foreign exchange risk. Insider and affiliate transactions must be arm’s-length, documented, and board-reviewed; compliance with Regulations O and W will likely satisfy the standard.

Custody. The Final Rule governs the custody of payment stablecoins. Custodians must separately record and account for “covered assets” such as payment stablecoin private keys and payment stablecoin reserves. Custodians must maintain possession and control of such covered assets. Although a custodian may not commingle custody assets with its own assets, omnibus accounts may be used to commingle assets of multiple customers, and sub-custodians may be used who also may utilize omnibus accounts. However, the reserve assets of a PPSI may not be commingled with that PPSI’s other assets in the same commingled account.

Multi-brand structures. The OCC determined to not include a one-brand-per-PPSI requirement in the Final Rule. Reserve reporting is required at the payment stablecoin brand level. The OCC made certain technical changes in the Final Rule to accommodate the use of multiple special purpose vehicles by PPSIs. 

State and foreign payment stablecoin issuers. A nonbank state qualified payment stablecoin issuer crossing $10 billion in total consolidated outstanding issuance must notify the OCC within five calendar days and transition to the federal framework within 360 days or stop net new issuance, absent a waiver; one falling back below that threshold may exit OCC supervision upon an OCC determination. Foreign payment stablecoin issuers may offer stablecoins in the United States only if they are regulated in a jurisdiction Treasury finds comparable, registered with the OCC, hold reserves at U.S. financial institutions sufficient for U.S. customers’ liquidity demands, and are not located in a sanctioned jurisdiction.

What does this mean?

The Final Rule establishes a flexible, principles-based framework that moves toward industry positions on yield, reserves, and capital while holding firm on one-for-one backing, par redemption within two business days, and transparent monthly reporting. As a result, PPSIs must demonstrate safety and soundness by building and documenting credible programs rather than by satisfying bright-line ratios.

Existing U.S. PPSIs should begin application preparation immediately, with both a substantially complete application and a waiver request ready to file the moment intake opens. Issuing payment stablecoins after January 18, 2027, without a waiver risks criminal penalties, and because the OCC expects to waive only prior approval, PPSIs must ensure their compliance infrastructure conforms with the GENIUS Act and Part 15 now. 

On yield, removal of the presumption is a meaningful win for the cryptocurrency industry but not a safe harbor. PPSIs should test rewards programs, distribution and white-label agreements, exchange incentives, and affiliate payment flows for economic substance rather than form and should document bona fide service rationales contemporaneously. PPSIs should also expect scrutiny in licensing and supervision and monitor forthcoming OCC guidance and early enforcement actions.

The Final Rule also creates opportunities for white-label and stablecoin-as-a-service arrangements. By declining to require a separate issuer for each stablecoin brand, the OCC preserves flexibility for regulated issuers to support multiple branded products. This could enable fintechs and other businesses to offer branded stablecoins without assuming the full regulatory burden of becoming an issuer themselves. However, these arrangements will require careful allocation of responsibility for reserves, redemption, compliance, and customer relationships, particularly where multiple brands rely on a common issuer.

Regarding reserves, PPSIs should build stress testing that includes significant positive interest-rate scenarios, establish and periodically test monetization channels such as repurchase lines, document custodian due diligence, and consider a buffer calibrated to the redemption profile. Operationally, PPSIs need month-end close processes capable of supporting published, accountant-examined reserve reports and officer certifications; weekly PS-01 reporting from January 25, 2027 and quarterly PS-02 reporting from March 31, 2027, subject to OMB approval; and escalation protocols for same-day notice of reserve shortfalls and 24-hour notice when redemption requests exceed 10% of outstanding issuance.

For banks, the Final Rule also highlights the importance of distinguishing payment stablecoins from tokenized deposits. Because tokenized deposits fall outside the GENIUS Act’s payment stablecoin framework, including its prohibition on yield, banks evaluating blockchain-based payment products should consider whether a deposit-based structure may better accommodate their commercial objectives. The choice will depend on the intended customers, transferability, redemption arrangements, and regulatory treatment of the underlying instrument.

This Final Rule will not be the last word on payment stablecoins. Firms should track the OCC’s separate BSA, AML, and sanctions rulemaking; the parallel GENIUS Act rulemakings of the Federal Deposit Insurance Corporation, the Federal Reserve, and Treasury; and the OCC’s stated intention to update Part 15 as the market develops.

Client Alert 2026-202