OCC issues proposed rules to implement the GENIUS Act

The Proposal is one of several rulemakings that the federal banking agencies must implement under the GENIUS Act, and it is the first implementing prudential standards for payment stablecoin issuers. The Proposal includes all of the regulations the OCC is required to promulgate under the GENIUS Act other than those related to Bank Secrecy Act/anti-money laundering and sanctions compliance, which the OCC intends to address in a separate rulemaking in coordination with the Department of the Treasury. Noting that private sector forecasts estimate that payment stablecoin issuance will reach USD500 billion in 2026,² the OCC indicated in the Proposal that it expects that the implementation of the GENIUS Act, including regulatory clarity and simplification stemming from the Proposal, will result in greater demand for payment stablecoins, leading to an increase in their aggregate market capitalization.³

The Proposal would establish a comprehensive framework for the regulation and supervision of permitted payment stablecoins issuers (PPSIs) that would include standards and requirements related to:

• permissible and prohibited activities
• composition, diversification and custody of reserve assets
• redemption of stablecoins and related disclosures
• risk management, audit and reporting requirements
• examination and supervision
• capital requirements
• state qualified payment stablecoin issuers transitioning to the federal regulatory framework, and
• application and registration requirements for payment stablecoin issuers subject to the OCC’s jurisdiction, including both domestic and foreign payment stablecoin issuers.

The Proposal includes over 200 questions on which the OCC is soliciting input from the public. Comments on the Proposal must be submitted by May 1, 2026.

Background and applicability

The GENIUS Act, enacted by Congress on July 18, 2025 with strong bipartisan support, reflected a broad consensus on the need for greater regulatory clarity in the digital asset industry. (For further details, read our client alert outlining key provisions and requirements of the GENIUS Act.)

The GENIUS Act established the first U.S. statutory federal regulatory framework for payment stablecoins and made it unlawful for any person to issue payment stablecoins in the United States unless such person is a PPSI, defined in Section 2(23) of the GENIUS Act as (1) a subsidiary of an insured depository institution that has been approved to issue payment stablecoins by its primary federal banking regulator; (2) a federal qualified payment stablecoin issuer (defined to include issuers approved to issue payment stablecoins and regulated by the OCC); or (3) a state qualified payment stablecoin issuer (defined to include issuers approved to issue payment stablecoins and regulated by state banking regulators).⁴ The GENIUS Act becomes effective on the earlier of the date that is 18 months after the date of its enactment (January 18, 2027) or 120 days after the primary federal payment stablecoin regulators issue final regulations implementing the GENIUS Act.

The Proposal would apply to activities related to the issuance of payment stablecoins and certain custody activities of:

• national banks and their subsidiaries
• federal savings associations and their subsidiaries
• federal branches of foreign banks and their subsidiaries
• foreign payment stablecoin issuers
• nonbank entities that seek to be or are approved by the OCC as federal qualified payment stablecoin issuers, and
• state qualified payment stablecoin issuers for which the OCC has regulatory or enforcement authority.

Consistent with the definition in the GENIUS Act, the Proposal limits the definition of PPSI to entities that are subject to the OCC’s jurisdiction, i.e., an entity formed in the United States that is (1) a subsidiary of an insured national bank or federal savings association that has been approved by the OCC to issue payment stablecoins; (2) a federal qualified payment stablecoin issuer; or (3) a state qualified payment stablecoin issuer subject to the OCC’s regulatory or enforcement authority under Section 4 of the GENIUS Act. ⁵

Permitted activities

Permitted activities of PPSIs are generally limited to those expressly authorized in Sections 4(a)(7) and 16(b) of the GENIUS Act.⁶ Under the Proposal, a PPSI may only:

• issue and redeem payment stablecoins
• manage payment stablecoins reserves, including purchasing, selling and holding reserve assets or providing custodial services for reserve assets consistent with applicable state and federal law
• provide custodial or safekeeping services for payment stablecoins, required reserves or private keys
• assess fees associated with purchasing and redeeming payment stablecoins
• act as principal or agent with respect to any payment stablecoin
• pay fees to facilitate customer transactions, and
• undertake any other activities that directly support activities related to the issuance, redemption, reserve management or custody of payment stablecoins.

The Proposal makes clear that the list of permissible activities set forth in the Proposal should not be construed to limit the authority of a depository institution, national bank or trust company to engage in activities permissible pursuant to applicable state and federal law.

Prohibited activities

Prohibition on paying interest or yield

Consistent with Section 4(a)(11) of the GENIUS Act,⁷ the Proposal provides that a PPSI may not pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) in connection with the holding, use or retention of payment stablecoins.

The OCC acknowledged in the Proposal that PPSIs could attempt to make prohibited payments of interest or yield to payment stablecoins holders through arrangements with third parties. Further, the OCC explained that it would not be possible to identify all (or even most) potential arrangements with third parties that it may prohibit under Section 4(a)(11) of the GENIUS Act. The Proposal, therefore, includes a rebuttable presumption that certain types of arrangements with certain types of persons would constitute prohibited payments of yield or interest by a PPSI to the holder of a payment stablecoin if:

• the PPSI has a contract, agreement or other arrangement with an affiliate⁸ of the PPSI or a related third party⁹ to pay interest or yield to the affiliate or related third party, and
• that affiliate or related third party (or its affiliate) has a separate contract, agreement or arrangement to pay interest or yield to stablecoin holders solely in connection with the holding, use or retention of such payment stablecoins. 

The presumption may be rebutted via a written submission to the OCC. The OCC acknowledged that other arrangements which are not captured by the presumption may violate the statutory prohibitions of the GENIUS Act or constitute evasion thereof and noted that it will assess other arrangements on a case-by-case basis. Nevertheless, the OCC also recognized that the presumption is not intended to prevent a merchant from independently offering a discount to a payment stablecoin holder for using payment stablecoins or to prevent a PPSI from sharing in the profits derived from the payment stablecoin with a non-affiliate partner in a white-label arrangement.

Prohibition on use of deceptive names and marketing

Under the Proposal, a PPSI is prohibited from using deceptive names or marketing, such as: 

• using the term “United States,” “United States Government” or “USG” in the name of the payment stablecoin
• marketing a payment stablecoin in a way that a reasonable person would perceive the stablecoin to be the legal tender of, or issued or guaranteed by, the United States, and
• directly or through implication representing that payment stablecoins are backed by the full faith and credit of, or guaranteed by, the U.S. government or subject to federal deposit insurance.

A PPSI is, however, permitted to use an abbreviation relating to a pegged currency, such as “USD.”

Prohibition on pledging or rehypothecation

Consistent with the GENIUS Act, a PPSI must not pledge, rehypothecate or reuse any reserve assets either directly or indirectly (e.g., through a third-party custodian of the reserve assets), with limited exceptions consistent with those set forth in the GENIUS Act.

Reserve assets

Reserve requirements

A PPSI is required to maintain reserves backing the outstanding payment stablecoins of the PPSI “on an at least one-to-one basis.” Specifically, reserve assets must be:

• identifiable
• segregated from and not commingled with other assets owned or held by the PPSI
• at all times have a total fair value that equals or exceeds the outstanding issuance value of the PPSI, which is measured by the par value of a PPSI’s outstanding payment stablecoins, and
• are either held directly by the PPSI or within the custody of an eligible financial institution.

Notably, the outstanding issuance value of payment stablecoins issued by a PPSI is based on the total consolidated par value of all of the PPSI’s payment stablecoins rather than on the fair value of the outstanding issued payment stablecoin. Thus, if the fair value of the payment stablecoin decreases (i.e., if the payment stablecoin de-pegged in the secondary market), the PPSI would nevertheless be obligated to retain a stock of reserve assets, the fair value of which equals or exceeds the par value of outstanding payment stablecoins. The OCC indicated that this approach is intended to ensure that the PPSI is able to credibly meet redemption requests, including in adverse circumstances.

A PPSI must be able to demonstrate operational capability to access and monetize the reserve assets, commensurate with its risk profile and business model. The Proposal explains that the inability to do so would undermine the ability of a PPSI to maintain the stable value of its payment stablecoin. Withdrawal of surplus reserve assets in excess of outstanding issuance value is permitted only once per month, upon the publication of the composition report that a PPSI is required to publish monthly setting forth the number of outstanding payment stablecoins and the amount and composition of reserve assets. The report must be examined by a registered public accounting firm and certified by the PPSI’s CEO and CFO. 

Reserve composition

Reserve assets must be high-quality liquid assets consisting only of one of the following eight eligible asset types:

• U.S. coins and currency (including Federal Reserve notes) or money standing to the credit of an account with a Federal Reserve Bank
• funds held as deposits or insured shares payable upon demand at an insured depository institution (including any foreign branches or agents, including correspondent banks, of an insured depository institution)
• Treasury bills, Treasury notes or Treasury bonds with a remaining maturity of 93 days or less
• money received under repurchase agreements, with the PPSI acting as a seller of securities and with a no longer than overnight maturity, that are collateralized by Treasury bills with a maturity of 93 days or less
• reverse repurchase agreements, with the PPSI acting as a purchaser of securities and with a no longer than overnight maturity, that are collateralized by Treasury bills, Treasury notes or Treasury bonds on a no longer than overnight basis, subject to overcollateralization in line with standard market terms, that are (i) tri-party, (ii) centrally cleared through a clearing agency registered with the Securities and Exchange Commission (SEC) or (iii) bilateral with a counterparty that the PPSI has determined to be adequately creditworthy even in the event of severe market stress
• securities issued by an SEC-registered investment company or other registered government money market fund that are invested solely in underlying assets listed above
• any other similarly liquid federal government-issued asset approved by the OCC, in consultation with a state payment stablecoin regulator, if applicable, of the PPSI, based on consideration by the OCC of certain relevant factors set forth in the Proposal, and
• tokenized forms of certain of the reserve asset types listed above.

Asset diversification and deposit concentration

The Proposal includes two alternative options for implementing the Genius Act’s reserve asset diversification requirements,¹⁰ only one of which would be selected in the final rule.

• Option A would apply a principles-based general requirement with an optional quantitative safe harbor. Specifically, a PPSI would be required to maintain reserve assets that are sufficiently diverse to manage potential credit, liquidity, interest rate and price risks. A PPSI would be deemed to satisfy the safe harbor requirements if it meets the quantitative requirements outlined below on each business day.
• Option B would impose mandatory quantitative requirements applicable to all PPSIs on each business day, as outlined below.

Under each Option A and Option B, the following requirements would be applicable:

• “Daily liquidity:” the PPSI maintains at least 10% of its reserve assets as deposits or insured shares payable upon demand or money standing to the credit of an account with a Federal Reserve Bank.
• “Weekly liquidity:” the PPSI maintains at least 30% of its reserve assets as deposits or insured shares payable upon demand, money standing to the credit of an account with a Federal Reserve Bank, or amounts receivable and due unconditionally within five business days on pending sales of reserve assets, maturing reserve assets or other maturing transactions.
• The PPSI maintains no more than 40% of its reserve assets at any one eligible financial institution, whether as deposits or insured shares at any one insured depository institution, securities custodied at any one eligible financial institution, bilateral reverse repurchase agreements with any counterparty or through other exposures.
• The PPSI maintains no more than 50% of the 10% reserve assets serving as “daily liquidity” at any one eligible financial institution.
• The PPSI’s total stock of reserve assets have a weighted average maturity of no more than 20 days.

Minimum insured amount for PPSIs with an outstanding issuance value of USD25 billion or more

The Proposal would require a PPSI with an outstanding issuance value of USD25bn or more to maintain, on each business day, at least 0.5% of its reserve assets in the form of insured deposits or insured shares at an insured depository institution, up to a cap of USD500 million.

Failure to meet minimum reserve asset requirements

If a PPSI fails to meet required reserve requirements, it is immediately prohibited from issuing any new payment stablecoins except as necessary to facilitate transfers of its outstanding payment stablecoins from one distributed ledger to another. A PPSI that fails to meet minimum reserve asset requirements for 15 consecutive business days (which may be extended by the OCC in its sole discretion) must begin liquidation of reserve assets and redemption of outstanding payment stablecoins. A PPSI may not charge customers a fee to redeem their payment stablecoins at any time during the liquidation.

Redemption of payment stablecoins

The Proposal sets forth certain requirements with respect to disclosure of a PPSI’s redemption policy and timeframes for the redemption of payment stablecoins. Consistent with the GENIUS Act,¹¹ a PPSI must include certain minimum information in its publicly disclosed redemption policy, including the timeframes in which a PPSI will redeem payment stablecoins and clear instructions on how a payment stablecoin holder can redeem a payment stablecoin. 

A PPSI must also include in its disclosures the issuer’s name, any fees associated with purchasing or redeeming payment stablecoins and a link to the monthly composition reports regarding the PPSI’s reserve assets.

A PPSI’s redemption policy must provide that timely redemption may not exceed two business days following the date of the requested redemption and state that any discretionary limitations on timely redemptions can only be imposed by the OCC (or, with respect to a state qualified payment stablecoin issuer (SQPSI), the OCC, the Board of Governors of the Federal Reserve (Federal Reserve) or the state payment stablecoin regulator). 

However, if a PPSI faces redemption demands in excess of 10% of its outstanding issuance value in a single 24-hour period, the PPSI may be permitted up to seven days to redeem the stablecoins. The OCC may also extend timely redemption if the PPSI poses a threat to safety and soundness or financial stability, or an extension is otherwise in the public interest. 

Risk management

The GENIUS Act requires the OCC to implement appropriate operational, compliance and information technology risk management principles-based requirements and standards that are tailored to the business model and risk profile of PPSIs.¹²

Accordingly, the Proposal requires a PPSI to maintain internal controls and information systems to support effective risk management that are appropriate to its size and complexity, including clear organizational structures with segregation of duties, effective risk assessment processes, timely and accurate reporting, procedures for managing and safeguarding assets, and compliance with applicable laws and regulations. 

A PPSI must also have an internal audit system; manage interest rate risk, asset growth and earnings; and implement controls regarding insider and affiliate transactions, service provider arrangements and liquidity, diversification and concentration management. 

The Proposal includes a number of information technology and security requirements addressing the security of customer information and the safe handling of digital assets. A PPSI that becomes aware of an incident of unauthorized access to sensitive customer information, including a customer’s private key, must conduct a reasonable investigation to determine the likelihood that information has or will be misused, and depending on the outcome of the investigation, provide notification to the OCC.

Examinations, reports, and audits

Under the Proposal, the OCC would conduct a full-scope examination of every PPSI subject to its supervision at least once during each 12-month period. However, the OCC has discretion to conduct a full-scope examination every 18 to 36 months if, among other things, the PPSI has an outstanding issuance volume of less than USD1bn or less than USD25bn in total monthly trading volume. 

A PPSI must comply with reporting requirements as follows:

• confidential weekly reporting in the manner and form to be specified by the OCC on its website
• reports of financial condition, which must be submitted to the OCC within 30 days of the end of a quarter, and
• other reports, as may be required by the OCC.

A PPSI with more than USD50bn in outstanding issuance value that is not subject to certain reporting requirements under the Securities and Exchange Act of 1934 is required to prepare in accordance with GAAP an annual financial statement, which must be audited by a registered public accounting firm in accordance with all applicable auditing standards established by the Public Company Accounting Oversight Board, including those related to auditor independence, internal controls and related party transactions. Audited financial statements must be made available on the PPSI’s website and submitted annually to the OCC.

Finally, the Proposal would establish a change in control framework for PPSIs similar to that under the Change in Bank Control Act.

Capital and operational backstop

Section 4(a)(4)(A)(i) of the GENIUS Act¹³ requires the OCC to implement capital requirements for PPSIs that: (1) are tailored to the business model and risk profile of PPSIs; (2) do not exceed requirements that are sufficient to ensure the ongoing operations of PPSIs; and (3) if necessary to ensure the ongoing operations of PPSIs, may include capital buffers that are tailored to the business model and risk profile of PPSIs.

The Proposal adopts an individualized approach to setting capital requirements and includes a minimum capital requirement that will be tailored to the business model and risk profile of each PPSI. In explaining this approach, the OCC noted that “[d]ue to the novelty of payment stablecoins and various business models for stablecoin issuers being discussed among industry participants, the OCC believes that setting capital requirements based on individual evaluations of prospective [PPSIs] would be most appropriate at this time.” 

• Regulatory capital for PPSIs would consist of two capital elements: common equity tier 1 capital and additional tier 1 capital. The Proposal would not impose any specific ratio between the regulatory capital elements or minimum amounts of any capital element and would not require any specific deductions from regulatory capital instruments.
• A “de novo” PPSI (meaning a PPSI that has received OCC approval to issue a payment stablecoin within the prior three years or a SQPSI that has transitioned to the federal regulatory framework within the prior three years and has not received a waiver from federal supervision from the OCC) would be subject to requirements set by the OCC, with a minimum of USD5m for a period of three years, although the OCC may shorten or extend this period in its discretion.
• Ongoing capital requirements would require a PPSI to maintain capital commensurate with the level and nature of all risks to which the PPSI is exposed, including risks for off-balance sheet activities.
• A PPSI would be required to have a process for assessing its overall capital adequacy in relation to its business model and risk profile and a comprehensive strategy for sustaining an appropriate level of capital to maintain ongoing operations.

Operational backstop and individual additional capital or backstop requirement

Under the Proposal, a PPSI would be required to hold a designated pool of highly liquid assets to enable it to maintain ongoing operations during a business disruption. This proposed backstop would be independent of the de novo or ongoing capital requirements and from any assets held as reserve assets. The operational backstop would be calculated based on the actual total expenses of the PPSI over the previous 12 months.

In addition, the Proposal provides the OCC with authority to impose an additional capital or backstop requirement for individual PPSIs in light of specific circumstances, including, among others:

• the failure of management to assess an appropriate capital requirement to support ongoing operations consistent with the PPSI’s business model and risk profile
• a PPSI that is experiencing significant volatility in stablecoin issuance or redemption, and
• a PPSI that may be adversely affected by the activities or condition of its affiliate(s), or other persons or institutions, with which it has significant business relationships.

State qualified payment stablecoin issuers

Crossing the USD10bn outstanding issuance threshold

Under Section 4(d) of the GENIUS Act,¹⁴ a SQPSI that is a nonbank entity that reaches a consolidated total outstanding issuance of more than USD10bn must transition to the federal regulatory framework within 360 days or cease issuing stablecoins until the SQPSI is under the USD10bn threshold.

The Proposal includes procedures for a nonbank SQPSI to transition to federal regulation and supervision. Within five calendar days of crossing the USD10bn threshold for outstanding issuance value, an SQPSI must provide written notice to the OCC specifying, among other things, the state(s) that currently regulate the SQPSI, the SQPSI’s outstanding issuance value as of the date of the notice, the date the SQPSI crossed the USD10bn threshold, an indication of whether and when the SQPSI ceased issuing, on a net basis, new payment stablecoins and whether the SQPSI seeks to request a waiver to remain solely supervised by a state payment stablecoin regulator.

Waiver from federal supervision

Notwithstanding the transition requirement described above, the OCC may permit a nonbank SQPSI that reaches the USD10bn threshold to remain solely supervised by a state payment stablecoin regulator based on its consideration of the following criteria:

• the capital maintained by the SQPSI
• the past operations and examination history of the SQPSI
• the experience of the state payment stablecoin regulator in supervising payment stablecoin and digital asset activities, and
• the supervisory framework, including regulations and guidance, of the SQPSI with respect to payment stablecoins and digital assets.

The Proposal provides that the OCC would presumptively approve a waiver request if the relevant state payment stablecoin regulator has: (1) established a prudential regulatory regime for the supervision of digital assets or payment stablecoins as of April 19, 2025 that has been certified pursuant to Section 4(c) of the GENIUS Act; and (2) approved one or more issuers to issue payment stablecoins under the supervision of such state payment stablecoin regulator.

The presumption would not apply if the OCC were to find by clear and convincing evidence that the criteria set forth above are not substantially met or that the SQPSI poses significant safety and soundness risks to the financial system of the United States.

Unusual and exigent circumstances

Consistent with Section 7(e) of the GENIUS Act,¹⁵ the Proposal provides that if the OCC determines that unusual and exigent circumstances exist and that there is reasonable cause to believe that the continuation of any activity, including failure to act, by a nonbank SQPSI constitutes a serious risk to the financial safety, soundness or stability of the SQPSI, the OCC will impose restrictions on the SQPSI in the form of a directive with the effect of a final cease-and-desist order. Such restrictions may include limitations on:

• redemptions of payment stablecoins
• transactions between the SQPSI, a holding company, and the subsidiaries or affiliates of either the SQPSI or the holding company, and
• any activities of the SQPSI that might create a serious risk that the liabilities of a holding company and the affiliates of the holding company may be imposed on the SQPSI.

Licensing of domestic payment stablecoin issuers

In accordance with Section 5 of the GENIUS Act,¹⁶ the Proposal outlines the application process for entities seeking to become a PPSI. An applicant must submit an application that will be available on the OCC’s website, and each director, executive officer and principal shareholder of the applicant must submit the information prescribed in the Interagency Biographical and Financial Report.

The OCC will consider the four factors set forth in the GENIUS Act when evaluating an application:

• the ability of the applicant (or in the case of an applicant that is an insured national bank, federal savings association or insured federal branch of a foreign bank, the subsidiary of the applicant) based on financial condition and resources, to meet the requirements for issuing payment stablecoins under the proposed rule
• whether any officer or director of the applicant has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism or financial fraud
• the competence, experience, and integrity of the officers, directors, and principal shareholders of the applicant, its subsidiaries, and parent companies, and
• whether the applicant’s redemption policy for its payment stablecoins meets the standards for redemption set forth in the OCC’s rules.

Although permitted under the GENIUS Act, the OCC has not proposed additional factors (but has solicited comments as to whether additional factors are necessary to ensure the safety and soundness of the PPSI).

Registration of foreign payment stablecoin issuers

The Proposal would generally impose the same requirements regarding reporting, supervision, examination and prohibition on the payment of interest on a foreign payment stablecoin issuer (FPSI) as the rule provides for PPSIs. An FPSI that seeks to register with the OCC must file an application with the OCC that also includes, in addition to the form application:

• evidence that the Secretary of the Treasury has determined that the applicant is subject to a regulatory and supervisory regime comparable to the GENIUS Act, under Section 18 of the GENIUS Act¹⁷
• a certification that the applicant will make available to the OCC all information that the OCC deems necessary to determine and enforce compliance with the GENIUS Act
• the applicant’s consent to U.S. jurisdiction related to enforcement of the GENIUS Act and the OCC’s rules, and
• a certification that any filing or supporting material submitted to the OCC contains no material misrepresentations or omissions.

Consistent with Section 18 of the GENIUS Act, the Proposal outlines five factors that the OCC will consider when evaluating an application from an FPSI:

• the Secretary of the Treasury’s final determination that the FPSI is subject to a regulatory and supervisory regime comparable to the GENIUS Act with respect to payment stablecoins under Section 18 of the GENIUS Act
• the financial and managerial resources of the U.S. operations of the FPSI
• whether the FPSI will provide adequate information to the OCC to determine compliance with the GENIUS Act and the OCC’s rules
• whether the FPSI presents a risk to the financial stability of the United States, including risks relating to ensuring timely redemption for U.S. customers, and
• whether the FPSI presents illicit finance risks to the United States.

The Proposal also includes the following supervisory conditions that would apply to FPSIs that receive registration approval:

• Upon request by the OCC, the FPSI must provide the OCC prompt and complete access to all officers, directors, employees and agents and to all relevant books and records (in English) in a form and location accessible to the OCC in the United States.
• The FPSI must provide evidence that it holds reserves in the United States that are sufficient to meet the liquidity demands of U.S. customers on an ongoing basis, including by submitting monthly reporting to the OCC. The reserves must be held at U.S. financial institutions.

OCC-regulated custodians (covered custodians)

The Proposal includes principles-based requirements for covered custodians, i.e., OCC-regulated entities¹⁸ providing custodial or safekeeping services for payment stablecoin reserves, payment stablecoins used as collateral, private keys used to issue payment stablecoins, as well as cash and other property received in the course of the provision of custodial or safekeeping services for such assets (covered assets).

A covered custodian must separately account for the covered assets of its customers and must treat and deal with those covered assets as belonging to such customer and not as the property of the covered custodian. A covered custodian must also take appropriate steps to protect the assets of its customers from the claims of creditors of the covered custodian or any sub-custodian and maintain possession or control of the assets of a customer that are held directly, including in a digital wallet for which the covered custodian controls the associated private keys.

Moreover, although a covered custodian is prohibited from commingling customer assets with its own assets, it may commingle assets of multiple customers in one or more omnibus accounts.

With respect to holding cash, the Proposal makes clear that an insured national bank or federal savings association that provides custodial or safekeeping services, including as a sub-custodian, for covered assets that are in the form of cash may hold such cash in the form of a deposit liability, provided such treatment is consistent with federal law.

Looking ahead

The Proposal includes over 200 questions that seek detailed comments on all aspects of the Proposal. While the OCC’s final rules will be shaped by the comment process, legislation currently pending in Congress on digital asset market structure¹⁹ could also affect the OCC’s final rulemaking, particularly with respect to the GENIUS Act’s prohibition on paying interest or yield. Moreover, the GENIUS Act requires federal payment stablecoin regulators to issue implementing regulations within one year of its enactment and to do so in coordination. The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are expected to issue proposed regulations in the near future to implement their respective portions of the prudential requirements of the GENIUS Act.²⁰ Additional regulations must also be issued by the Secretary of the Treasury, among others. 

Footnotes

1. OCC, Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency, Notice of Proposed Rulemaking, 91 Fed. Reg. 10,202 (Mar. 2, 2026).

2. 91 Fed. Reg. at 10,278.

3. 91 Fed. Reg. at 10,268.

4. 12 U.S.C. § 5901(23).

5. 12 U.S.C. § 5903.

6.  Under the GENIUS Act, a digital asset service provider, defined to include digital asset custodians and exchanges (among other persons), is prohibited from offering or selling a payment stablecoin to a person in the United States unless the payment stablecoin is issued by a PPSI or qualifying foreign payment stablecoin issuer. The Proposal does not use the term “digital asset service provider” and the OCC has asked whether additional guidance regarding the GENIUS Act’s provisions related to digital asset service providers is necessary. Neither the GENIUS Act nor the Proposal meaningfully addresses how obligations would apply to decentralized protocols (e.g., decentralized exchanges, decentralized finance networks (“DeFi”)) that operate without centralized intermediaries, and the absence of regulatory guidance on who bears responsibility for restricting access to noncompliant stablecoins in DeFi leaves this a significant open question.

7. 12 U.S.C. § 5903(a)(11).

8. The definition of “affiliate” in the Proposal is consistent with that in the Bank Holding Company Act of 1956 (i.e., a person that controls, is controlled by, or is under common control with another person).

9. For purposes of this prohibition, a “related third party” means “[a] person offering to pay interest or yield to payment stablecoin holders as a service; and . . . [a]ny person that the issuer issues payment stablecoins on the person’s behalf or under the person’s branding.” 

10. 12 U.S.C. § 5903(a)(4)(A)(iii).

11. 12 U.S.C. § 5903(a)(1)(B).

12. 12 U.S.C. § 5903(a)(4)(A)(iv).

13. 12 U.S.C. § 5903(a)(4)(A)(i).

14. 12 U.S.C. § 5903(d).

15. 12 U.S.C. § 5906(e).

16. 12 U.S.C. § 5904.

17.  12 U.S.C. § 5916.

18. A “covered custodian” is defined in the Proposal to include a national bank, federal savings association, federal branch or PPSI to the extent of such person’s provision of custodial or safekeeping services for covered assets.

19. E.g., the Digital Asset Market Clarity Act of 2025 (also known as the CLARITY Act of 2025).

20. In December 2025, the FDIC issued a proposed rule regarding the PPSI application process for FDIC-supervised institutions.