OCC Proposed Rules Under the GENIUS Act

On March 2, 2026, the Office of the Comptroller of the Currency (OCC) issued proposed rules under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act). The proposal is intended to establish a more comprehensive federal framework for the issuance of payment stablecoins and related digital asset activities.

Scope and Structure of the Proposed Framework

The OCC proposal applies to a defined set of entities under its jurisdiction and is designed to establish a more unified federal framework for stablecoin issuance and related activities.

Covered Entities: The proposal applies to national banks and federal savings associations (and their subsidiaries), federal branches of foreign banks, nonbank federal qualified payment stablecoin issuers (FQPSIs), and certain state-qualified issuers that exceed the $10 billion issuance threshold or present unusual supervisory concerns.
Legal Exclusivity: For federal qualified issuers, the OCC would exercise exclusive visitorial and supervisory powers, preempting inconsistent state licensing regimes while preserving state consumer protection laws.
Rule Organization: The framework is divided into five subparts: Purpose and Definitions (A), Issuer Activities and Supervision (B), Custody Requirements (C), Application Processes (D), and Capital Standards (E).

Reserve Composition, Liquidity, and Redemption

The OCC proposal would impose a strict 1:1 reserve requirement intended to support financial stability and strengthen redemption confidence for stablecoin holders.

Eligible Assets: Reserves must consist solely of high-quality liquid assets (HQLA), including U.S. currency, demand deposits at insured banks, and U.S. Treasury bills with a remaining maturity of 93 days or less.
Liquidity Tiers: The proposal would require issuers to maintain at least 10% daily liquid assets (cash or Federal Reserve balances) and at least 30% weekly liquid assets (assets maturing within five business days).
Concentration Limits: Issuers may not hold more than 40% of reserves at any single eligible financial institution, reducing counterparty concentration risk.
Timely Redemption: Issuers must establish procedures for redemption at par value no later than two business days after a request. That period may be extended to seven calendar days only during extreme market stress, defined as redemptions exceeding 10% of issuance within 24 hours.

Insight: The OCC Framework Goes Beyond Licensing

Unlike a narrow licensing rule, the OCC proposal is structured as a broader supervisory framework covering reserves, redemption, custody, capital, reporting, cybersecurity, and governance.

Why That Matters

The proposal suggests that the OCC does not view payment stablecoin issuance as a simple product approval. Instead, it treats stablecoin issuance as an ongoing regulated activity that must operate with institutional controls similar to other federally supervised financial activities.

Operational Focus: The proposal emphasizes resilience, governance, and continuity of operations, not just reserve sufficiency.
Supervisory Depth: Issuers would face continuing requirements around audits, disclosures, internal controls, cybersecurity, and redemption practices.
Strategic Implication: Firms entering this space should expect a full compliance infrastructure, not merely a chartering or application exercise.

Practical Takeaway

For prospective issuers, the real challenge may not be obtaining approval but demonstrating the ability to sustain a federally supervised operating model over time.

Capital, Operational Backstop, and Risk Management

The OCC’s proposal places significant emphasis on operational resilience rather than relying solely on traditional credit-based bank capital concepts.

Initial Capital Floor: De novo issuers would be required to maintain a minimum capital floor of $5 million, generally for a 36-month period.
Operational Backstop: Issuers must hold a separate pool of highly liquid assets, independent of stablecoin reserves, equal to 12 months of total operating expenses.
Risk Management Standards: The proposal includes principles-based standards for internal controls, internal audit, interest rate exposure monitoring, and prudent asset growth.
IT and Cybersecurity: Issuers must implement a security program that includes secure private key management, formal smart contract verification, and incident response procedures for unauthorized access.

Custody, Disclosure, and Reporting Obligations

The framework also introduces strong transparency and custody standards intended to prevent the issuance of tokens that lack credible asset backing.

Custody Protections: Covered custodians must segregate customer property, protect it from claims by their own creditors, and maintain control of private keys so that no other party can transfer assets without custodian consent.
Monthly Disclosures: Issuers must publish monthly reports describing reserve composition, average asset tenor, and geographic custody location. These reports must be examined by an independent accounting firm.
Executive Accountability: The CEO and CFO must personally certify the accuracy of monthly reserve reports, with potential criminal consequences for false reporting.
Weekly Data Reporting: Issuers must submit confidential weekly data to the OCC regarding trading volume, secondary market price movements, and the identity of their top 100 holders.

Strategic Considerations for Market Participants

The proposal creates distinct implications for banks, foreign issuers, broker-dealers, and other market participants.

Banks and IDIs: Insured institutions would be prohibited from issuing directly and instead would need to use a subsidiary. For regulatory capital purposes, the parent bank would deconsolidate the issuer subsidiary and deduct its retained earnings from capital to avoid double counting.
Foreign Issuers (FPSIs): Foreign entities would be required to register with the OCC and maintain sufficient reserves in U.S. financial institutions to meet U.S. customer redemption demands.
Broker-Dealers: Market participants may benefit from SEC interim guidance allowing a 2% capital haircut for qualifying payment stablecoins, aligning their treatment more closely with money market funds.
Prohibition of Yield: The OCC introduces a rebuttable presumption that any interest or yield paid through an affiliate or third-party arrangement violates the GENIUS Act’s prohibition on yield-bearing stablecoins.

Comparative Analysis of Proposed Issuer Requirements

Feature	FDIC Proposal (Banks)	NCUA Proposal (Credit Unions)	OCC Proposal (National Banks & Nonbanks)
Primary Applicant	The Parent IDI (Bank)	Joint filing by Applying Issuer and Parent Company(ies)	The Parent IDI (Bank) for bank-led structures
Application Format	Narrative letter application	Structured Manual with specific forms	Standardized OCC licensing forms
Biometrics	Certification of no prohibited felony convictions	Mandatory fingerprints for directors and officers	Discretionary fingerprinting for FBI background checks
Pre-filing	Standard supervisory channels	Encouraged virtual pre-filing meetings	Standard licensing channels intended to support a consolidated filing process
Accounting / Certification	Engagement letter required at filing	Certification of no material omissions	Certification of no material misrepresentations or omissions

Key OCC Nuances

The “Single Filing” Goal: The OCC indicates that where a stablecoin proposal also involves related corporate activities, such as joining a payment system, a single filing under Section 15.30 should generally be sufficient to reduce duplicative regulatory burden.
Biographical and Financial Reports: Directors, executive officers, and principal shareholders must submit an Interagency Biographical and Financial Report.
120-Day Review Window: Consistent with the GENIUS Act, the OCC would follow a 120-day decision clock after an application is deemed substantially complete.
Nonbank Pathway: Unlike the FDIC and NCUA proposals, the OCC rule expressly creates a licensing path for Federal Qualified Payment Stablecoin Issuers (FQPSIs), including certain nonbank entities and uninsured national trust banks.

Conclusion

The OCC proposal is notable not only because it establishes a federal pathway for stablecoin issuance, but also because it frames payment stablecoins as an activity requiring full-scale supervisory infrastructure. For banks, nonbanks, and foreign issuers alike, the proposal suggests that successful participation will depend on reserve discipline, operational resilience, governance, and sustained compliance capabilities.

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