On October 21, 2026, the Office of the Comptroller of the Currency (OCC) released a final rule (“Final Rule”) to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (“GENIUS Act” or the “Act”) covering entities subject to the OCC’s jurisdiction, including national banks, federal branches, and most nonbank issuers.
While seven federal agencies have issued proposed rules under the GENIUS Act, the Final Rule is the first comprehensive rulemaking under the Act that has been completed. It is also one of the most consequential rulemakings under the Act, as it imposes a comprehensive regulatory framework that will govern the largest permitted payment stablecoin issuers (PPSIs), including requirements relating to reserve assets, redemption rights, risk management, custody, and ongoing supervision and oversight.
The Final Rule takes effect on January 18, 2027, the effective date of the GENIUS Act.
The Final Rule is a critical, but not complete, expression of how the OCC plans to implement the GENIUS Act. The OCC leaves room for further rulemaking in the preamble, stating that it “anticipates that these implementing regulations will be updated, as necessary, in the years following the effective date of the GENIUS Act as the business practices of permitted payment stablecoin issuers” develop. Once granted approval, PPSIs should continue to monitor regulatory developments from the OCC and other agencies, including rulemaking, guidance, and statements from agency leadership.
The Final Rule retains much of the same content as the OCC’s March 2026 notice of proposed rulemaking (the “Proposal”). For a detailed description of the Proposal, please see our prior client alert. The OCC received approximately 328 comments on the Proposal and made updates to the Final Rule in response.
The Final Rule diverges from the Proposal in several ways, in certain cases replacing bright-line tests or prescriptive standards with principles-based language. The OCC acknowledges this shift in the preamble, explaining that it made certain changes to “provide more flexibility to issuers” and to adopt a “principles-based” approach consistent with the Act’s statutory text. The Final Rule diverges from the Proposal in these areas:
The Final Rule varies from the Proposal’s framework for implementing the prohibition in Section 4(a)(11) of the GENIUS Act on a PPSI paying the holder of a payment stablecoin interest or yield solely in connection with the holding, use, or retention of the payment stablecoin. The Proposal would have created a rebuttable presumption that a PPSI was acting in violation of this prohibition if it had arrangements with its affiliate or white-label partner that resulted in interest or yield being paid to holders solely in connection with the holding, use, or retention of the payment stablecoin.
The Final Rule eliminates this rebuttable presumption — which the OCC noted could have been both under and overinclusive — and instead incorporates the statutory prohibition.
The OCC’s elimination of the rebuttable presumption should not be taken as an indication that the agency will necessarily approve arrangements where a party other than the issuer pays interest or yield to holders of a payment stablecoin. In the preamble to the Final Rule, the OCC emphasizes that it retains authority to address evasion of the GENIUS Act under Section 4(h)(1), including the yield prohibition. The OCC notes that indirect payments may fall under the prohibition, including payments made by an agent of the PPSI on the PPSI’s behalf solely in connection with the holding, use, or retention of a payment stablecoin. Where there is concern that a PPSI offers only a nominal purpose for the payment of interest or yield to evade the statute, the OCC states that it will look to the substance of the transaction to determine the true purpose for the payment.
The preamble to the Final Rule suggests that the PPSI application process, rather than the language of the rule, will now serve as the limiting factor for interest and yield arrangements. PPSIs should therefore be prepared to explain why any payments made to holders of their payment stablecoin by a third party that the PPSI has a contractual relationship with are not “solely in connection with the holding, retention, or use” of the payment stablecoin. Transaction-based payments, particularly those tied to purchases of specific products, may carry a lower risk of falling under the prohibition, although the OCC declined to establish any categorical safe harbor in the Final Rule.
Ultimately, clarity on the scope of the prohibition may come through the interpretative letters published by the OCC approving specific payment arrangements and potentially through future rulemaking or legislation from Congress. The OCC notes in the preamble that it anticipates proposing a rulemaking clarifying the provision once it has sufficient experience identifying prohibited transactions.
Another area where the OCC took a less prescriptive approach in the Final Rule relates to the circumstances when it would impose limitations on redemption of payment stablecoins. Section 4(a)(1)(B) of the GENIUS Act requires each PPSI to establish procedures for the timely redemption of payment stablecoins and permits limitations on redemption to be imposed only by the PPSI’s primary regulator. The Final Rule largely mirrors the Proposal in defining “timely” to mean that a PPSI must redeem a payment stablecoin no later than two business days following the date of requested redemption. Importantly, however, it diverges from the Proposal by eliminating the automatic stress-related redemption extension.
Whereas the Proposal would have automatically extended the redemption timeline to seven calendar days if a PPSI faced redemption demands exceeding 10 percent of outstanding issuance value in a single 24-hour period, the Final Rule only requires reporting to the OCC in this instance. The OCC retains ultimate discretion to impose limitations on redemptions. This shift underscores that PPSIs should not rely on extension of the redemption period in times of market stress and should maintain a reserve asset portfolio that is sufficiently diversified and liquid to account for a range of scenarios.
The Final Rule adopts reserve asset diversification requirements designed to ensure that PPSIs can adequately meet redemption requests. The framework in the Final Rule combines and streamlines two alternative options presented in the Proposal:
The Final Rule adopts a hybrid approach, requiring a PPSI to maintain reserve assets that are sufficiently diverse to manage potential credit, liquidity, interest rate, and price risks, but also imposing two minimum quantitative requirements: (1) a requirement that the PPSI maintain at least 5 percent of reserve assets in demand deposits, insured shares, or Federal Reserve Bank balances; and (2) a prohibition on a PPSI holding more than 40 percent of reserve assets with a single counterparty.
Both minimum quantitative requirements were eased somewhat from prior rulemaking language regarding Option B. The OCC lowered the percentage of reserve assets required to be held in demand deposits or similarly liquid assets from 10 percent to 5 percent. The cap on reserve assets that can be held with a single counterparty also contains a significant new carveout — the Final Rule permits holding reserves in excess of the cap with a single custodian if the PPSI identifies itself as such to the custodian, ensures the custodian commits to complying with Section 10 of the GENIUS Act, and conducts appropriate due diligence and ongoing monitoring of the custodial relationship. The Final Rule also eliminates other quantitative requirements contained in Option B of the Proposal, including a sub-limit on daily liquidity concentration and a 20-day weighted average maturity requirement for reserves.
As with the prohibition on yield and restrictions on redemption, the language of the Final Rule grants the OCC significant discretion in implementing reserve asset diversification requirements. The preamble to the Final Rule states that the OCC expects a PPSI to measure and manage the risk of concentrating reserve assets and that a PPSI may need to maintain reserve assets in excess of the 5 percent liquidity threshold. The OCC adds teeth to this statement by introducing an entirely new stress-testing regime in the Final Rule. PPSIs are expected to engage in regular stress testing of their reserve asset portfolio in order to confirm the amount of reserve assets that they hold will continue to equal or exceed outstanding issuance value in stressed conditions, including in significant positive interest rate scenarios.
Rather than treating meeting the minimum requirements as a check-the-box exercise, issuers should ensure that their reserve assets are sufficiently diverse, both in type and location, to match the issuer’s business model. Issuers should pay particular attention to how stress scenarios, such as a sudden increase in interest rates, would impact their portfolio. Moreover, issuers should be on the lookout for future announcements from the OCC regarding the stress-testing regime, which was only briefly described in the Final Rule and will likely be fleshed out through future guidance.
Capital requirements are another area where the OCC simplified the Proposal’s framework in the Final Rule. The Proposal would have defined regulatory capital using a bank-style two-tier structure, an approach that generated significant pushback from commenters. Instead, the OCC adopted a simpler capital element based on GAAP tangible equity — any instrument qualifying as equity under GAAP counts as capital, from which the issuer must deduct intangible assets (including certain crypto-assets) and deferred tax assets.
The Final Rule grants the OCC flexibility in determining capital requirements for each PPSI. While the Final Rule extends the $5 million floor on minimum capital during the de novo period to the life of the PPSI, it notes that it retains authority to set higher capital requirements for more complex PPSIs as necessary.
The Final Rule also grants the OCC flexibility with respect to application of the operational backstop contained in the Proposal, which requires each PPSI to hold a pool of liquid assets distinct from reserve assets and minimum capital equal to 12 months of total expenses. Specifically, the Final Rule permits PPSIs to apply for a waiver from the OCC to exclude one-time expenses that are wholly unrelated to the continuing operation of the PPSI from this calculation.
As with reserve asset diversification requirements, issuers should ensure that the amount of capital they hold is consistent with their business model and sufficient to withstand stress scenarios. Determining the appropriate minimum level of capital will require proactive engagement with the OCC throughout the application process.
While not an explicit divergence from the Proposal, the absence of any prohibition on white labeling in the Final Rule is a significant development for issuers. In the Proposal, the OCC had asked whether it should restrict each PPSI to issuing only one brand of payment stablecoin. In the preamble to the Final Rule, the OCC indicates that many commenters opposed such a requirement, claiming it would impose an additional regulatory burden without creating meaningful risk reduction and would be inconsistent with the statutory text. Accordingly, the OCC decided not to implement a one-brand-per-issuer requirement in the Final Rule.
The OCC did note in the preamble, however, that such a structure may better protect the rights of payment stablecoin holders. Accordingly, the OCC stated that it anticipates that the process for obtaining licensure for proposed special purpose vehicle (SPV) issuers associated with an existing issuer will be streamlined compared to seeking or receiving the initial license. SPV applicants can leverage information contained in previous applications for related SPVs and rely on the risk management framework developed by their parent. Issuers planning to stand up white-label arrangements should consider whether a single-brand per-entity structure would meet the issuer’s business goals. Such a structure is not mandatory, however, and issuers may instead pursue alternative means of ensuring that their reserve asset arrangements adequately protect holders.
A common theme underlying significant changes made to the Final Rule from the Proposal is the adoption of a principles-based, rather than a prescriptive, approach. However, a principles-based approach does not necessarily equate to a more relaxed approach. Issuers should understand the changes in the Final Rule as placing a heightened premium on preparation for the application process, not as a reduction of regulatory scrutiny. Issuers should act now to ensure that business practices align with applicable requirements, that they have written policies and procedures serving as evidence of compliance with GENIUS Act requirements, and that they have assessed the risks that the OCC may focus on during the application process and identified potential mitigants.
In addition to ensuring their business plan aligns with the Final Rule, issuers should ensure that they are prepared to meet the January 18, 2027 effective date of the GENIUS Act and Final Rule, after which it will be unlawful for any person other than a PPSI to issue a payment stablecoin in the United States.
In tandem with the Final Rule, the OCC released a bulletin stating that, in line with Section 5(f) of the Act, it will generally grant waivers from this prohibition for existing issuers that have a substantially complete application before the agency before the January 18 deadline. The OCC will notify applicants within 30 days of receiving an application whether it is substantially complete. Accordingly, existing issuers have a narrow, approximately two-month, window to submit application materials in order to ensure they are deemed substantially complete prior to January 18.
Given the lack of clarity on certain issues in the Final Rule and compressed application timeline, issuers should retain flexibility in their business model, particularly with regard to areas left open to the OCC’s discretion in the Final Rule. Absent regulatory clarity, we expect conditional approvals and decision letters (which the OCC stated in the Final Rule it intends to publish) to serve as a living record of the agency’s view on issues including the permissibility of certain yield and white-labeling structures, reserve composition and placement, and minimum capital amounts. Given the Final Rule’s 120-day deemed approval requirement, initial decisions are expected in the first or early in the second quarter of 2027.
Issuers not regulated by the OCC, including subsidiaries of state-chartered banks and credit unions, which generally fall under the jurisdiction of their respective primary federal prudential regulators under the GENIUS Act, should view the Final Rule as an indication, but not a guarantee, of where their applicable final regulatory framework may land. The OCC stated that it “coordinated closely” with other federal agencies, which may include the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration, in implementing the Final Rule. However, the OCC noted several areas where it declined to adopt approaches taken by other agencies, including brand-level segregation for reserve assets and required disclosures regarding the non-applicability of FDIC pass-through deposit insurance, both of which were contained in the FDIC’s notice of proposed rulemaking. It remains unclear whether other federal payment stablecoin regulators will align the final rules they issue to the OCC’s Final Rule or continue to take divergent approaches on some issues.
Issuers with outstanding issuance at or below $10 billion that opt for state regulation should take particular note of changes in the OCC Rule, given the requirement in the GENIUS Act that each state’s payment stablecoin regulatory framework be “substantially similar” to the federal regulatory framework. Under the GENIUS Act, the Stablecoin Certification Review Committee (“Committee”), comprised of the Treasury Secretary, Federal Reserve Chair, and FDIC Chair, must approve each state’s regulatory framework upon determining that it meets or exceeds the Act’s applicable standards and requirements. In its April 2026 notice of proposed rulemaking proposing broad-based principles to implement this requirement, the U.S. Department of the Treasury (“Treasury”) proposed defining “federal regulatory framework” to mean the text of the GENIUS Act and implementing regulations issued by the OCC. Separately, on September 30, 2026, the Committee issued an interim final rule establishing procedures for reviewing state certifications, without addressing the substantive standards for substantial similarity. Treasury’s April rulemaking has not been finalized, and uncertainty remains regarding the extent to which any final Treasury rule would permit deviations from the OCC’s Final Rule.