Key Takeaways
- The OCC recently proposed its much-anticipated rules that would implement the GENIUS Act and establish a comprehensive federal licensing and prudential regulatory framework for payment stablecoin issuers subject to OCC jurisdiction.
- The Proposed Rules propose standards and requirements for payment stablecoin issuers relating to, among other areas, permitted activities, reserve asset composition, redemption timing, risk management (including private key management), custody, capital levels and periodic reporting. The OCC stated that they would address anti-money laundering and sanctions requirements in a separate rulemaking in coordination with the Treasury Department.
- The Proposed Rules also meaningfully extend a heavily-debated provision within the GENIUS Act that prohibits the direct payment of interest or yield by a payment stablecoin issuer to stablecoin holders. Importantly, the Proposed Rules would include an anti-circumvention provision that creates a rebuttable presumption intended to prohibit certain indirect payments by affiliates and “related third parties” of payment stablecoin issuers, including white-label partners.
- The OCC has asked over 200 specific questions in the Proposing Release, including in areas that are likely to have significant competitive, product design and operational implications. With the payment stablecoin market rapidly expanding in recent years and expectations of continued growth, we expect significant engagement with the OCC on the Proposed Rules prior to the comment deadline of May 1, 2026, from market participants, including stablecoin issuers, digital asset exchanges, banking organizations, and asset managers.
