OCC Launches Stablecoin Regulation Proposal to Support Genius ACT

The Office of the Comptroller of the Currency has released a 376-page proposed rulemaking, the most comprehensive federal stablecoin oversight document ever issued, signaling a definitive shift toward institutional-grade digital asset regulation in the United States.

Key Takeaways

• The U.S. finally has a federal stablecoin rulebook, and it's bank-grade. The OCC's 376-page proposal sets standards for reserves, redemptions, audits, and risk management that mirror traditional banking requirements. Issuing a payment stablecoin in the U.S. is no longer a gray area.
• The yield workaround era is over. The OCC doesn't just enforce the GENIUS Act's yield ban; it closes the loopholes. Affiliate arrangements where a third party pays interest on an issuer's behalf are now presumptively non-compliant.
• Scale determines your regulator. Under $10 billion in issuance? A certified state regime may suffice. Cross that threshold and federal OCC oversight becomes mandatory, with a 360-day clock to comply. Size now dictates regulatory jurisdiction.

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What Is the OCC, and Why Does It Matter in Crypto?

The Office of the Comptroller of the Currency (OCC) is a bureau of the U.S. Department of the Treasury that charters, regulates, and supervises all national banks and federal savings associations. 

In crypto, the OCC carries significant weight: it governs which financial institutions can issue payment stablecoins at the federal level, how reserves must be structured, and what operational standards issuers must meet.

Under the GENIUS Act, enacted July 18, 2025, the OCC became one of the primary federal regulators responsible for implementing the first-ever U.S. statutory framework for payment stablecoins. 

Read Also: List of Top Stablecoins in 2026 with Good Performance

On February 25, 2026, it delivered on that mandate with a sweeping proposed rulemaking that will define what OCC stablecoin oversight looks like in practice.

The GENIUS Act: A Statutory Foundation, Not a Full Rulebook

Before the OCC launched its stablecoin rulebook, Congress established the legal foundation for it. 

The GENIUS Act prohibits any person, individual, or entity from issuing a payment stablecoin in the United States unless they qualify as a "permitted payment stablecoin issuer." 

It also bans interest or yield payments on payment stablecoins, drawing a clear regulatory line between cash-equivalent tokens and investment instruments.

What the statute did not do was specify how issuers prove compliance. 

That task fell to the OCC and a coordinated group of regulators, the Federal Reserve, FDIC, and National Credit Union Administration, each responsible for its respective jurisdiction. 

The OCC's 376-page notice of proposed rulemaking (NPRM) addresses that gap with precision.

What OCC Stablecoin Rules Actually Cover

The OCC rolls out stablecoin rules under a new regulatory code, 12 CFR Part 15, covering six core pillars:

Reserve Asset Standards: Issuers must back every stablecoin at least 1:1 with high-quality liquid assets, specifically cash and short-term U.S. Treasury securities. No exotic instruments, no leveraged positions.

Redemption Rights: Token holders must be able to redeem at par within two business days under normal market conditions, a consumer protection standard that mirrors banking norms.

Audits and Public Reporting: Issuers must conduct independent audits and release regular public reserve reports, bringing disclosure requirements closer to those of publicly traded companies.

Risk Management: A principles-based framework governs cybersecurity, third-party vendor risk, and operational continuity, critical for digital asset infrastructure that runs 24/7.

Application Pathways: The proposal outlines how entities apply for OCC authorization as federal qualified payment stablecoin issuers, including subsidiaries of national banks and federal savings associations.

State vs. Federal: The $10 Billion Threshold Rule

One of the more nuanced dimensions of the OCC stablecoin framework is its tiered approach to jurisdiction.

Smaller issuers with less than $10 billion in outstanding stablecoin supply can operate under a state regulatory regime, provided a Stablecoin Certification Review Committee (composed of Treasury, the Fed, and the FDIC) formally certifies that state's rules as "substantially similar" to the federal standard.

But once an issuer crosses the $10 billion threshold, the federal framework is mandatory. They must transition within 360 days or secure a formal waiver. 

This structure preserves some space for state-level innovation while ensuring that systemically significant stablecoin issuers fall under uniform federal oversight.

Read Also: Digital Euro vs EURCV Stablecoin MiCA

The Yield Ban: The Most Contested Provision in OCC Stablecoin Rules

The GENIUS Act bans yield on payment stablecoins. The OCC's proposal doesn't just enforce that ban; it proactively targets the workarounds already in use across the industry.

At issue are arrangements where the stablecoin issuer itself does not pay interest, but an affiliate or "related third party" does, passing returns to holders indirectly. 

The OCC introduces a rebuttable presumption: if an issuer pays yield to an affiliate and that affiliate then pays yield to stablecoin holders, regulators will treat it as a violation of the statute. Issuers can attempt to rebut this presumption in writing, but the burden is on them.

The rule directly implicates existing market structures. PayPal currently pays rewards to PYUSD holders while Paxos serves as the technical issuer, exactly the kind of arrangement the OCC's rebuttable presumption would scrutinize. 

Independent whitelabel partnerships with non-affiliates, however, appear to remain permissible, as do merchant discounts for stablecoin payment.

Foreign Issuers and Global Market Access

The OCC's stablecoin proposal extends beyond U.S.-domiciled entities. 

Foreign stablecoin issuers seeking access to U.S. users must qualify as "permitted foreign payment stablecoin issuers", meeting equivalent reserve, redemption, and risk management standards and obtaining OCC approval. 

Those that cannot or do not will face progressive exclusion from the regulated U.S. market, raising the bar for any offshore operator targeting American consumers.

Timeline and What Comes Next

The OCC's proposal is open for public comment through May 18, 2026. 

The industry, from major banking associations to DeFi protocol operators, has 60 days to weigh in. 

Final rules must be in place before the GENIUS Act's effective date, which falls on the earlier of January 18, 2027, or 120 days after all primary regulators finalize their respective rules.

Notably absent from the current NPRM are Bank Secrecy Act, anti-money laundering, and OFAC sanctions rules, which will arrive in a separate Treasury rulemaking. 

The OCC's proposal is also expected to interact with the forthcoming CLARITY Act, which governs digital asset classification more broadly. 

Legal analysts suggest that by establishing a clear no-yield baseline for OCC-regulated stablecoins, the GENIUS Act rulemaking could simplify what the CLARITY Act needs to address on yield and exchange offerings.

A Line in the Sand for the Stablecoin Industry

The OCC stablecoin framework isn't incremental guidance; it's a foundational reset. 

For the first time, U.S. law draws a hard boundary between payment stablecoins and interest-bearing digital instruments, and the OCC is now translating that boundary into enforceable operational standards. 

Issuers that want access to the U.S. market, domestic or foreign, will need to meet bank-grade standards on reserves, transparency, and risk.

The comment period is the industry's clearest window to shape implementation. After May 18, 2026, the rules move toward finalization, and the clock on GENIUS Act compliance starts running in earnest.

FAQ

What is the OCC in crypto? 

The OCC (Office of the Comptroller of the Currency) is the U.S. federal regulator that oversees national banks, and under the GENIUS Act, it now also governs which entities can legally issue payment stablecoins in the United States.

What is OCC stablecoin regulation? 

OCC stablecoin regulation refers to the federal rules requiring stablecoin issuers to back tokens 1:1 with cash or U.S. Treasuries, redeem at par within two business days, submit to independent audits, and meet bank-grade risk management standards.

What did the OCC launch for stablecoins in 2026? 

On February 25, 2026, the OCC launched a 376-page proposed rulemaking under the GENIUS Act, the most comprehensive federal stablecoin oversight framework ever issued in the U.S., open for public comment until May 18, 2026.

Can stablecoin issuers pay yield under OCC rules? 

No. The GENIUS Act bans yield on payment stablecoins, and the OCC's proposal goes further by targeting affiliate workarounds, flagging arrangements where a related party pays interest on behalf of the issuer as a presumptive violation.

Who does the OCC stablecoin rulebook apply to?

It applies to subsidiaries of national banks, federal and state qualified stablecoin issuers, and foreign issuers seeking U.S. market access. Issuers under $10 billion may operate under a certified state regime; those above must comply with the federal framework within 360 days.

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