The U.S. Office of the Comptroller of the Currency (OCC) has issued a proposed rule to implement the GENIUS Act, the new federal law for payment stablecoins. The agency is now seeking public comments on the draft, which would set detailed standards for how banks and other qualified issuers offer dollar‑linked tokens.
What the GENIUS Proposal Would Change
The GENIUS Act, passed in 2025, created a category of “payment stablecoins” that must be redeemable at a fixed value on demand, usually one dollar. The OCC proposal explains how entities can become “federal qualified payment stablecoin issuers” and what rules they must follow on reserves, redemptions, and disclosures.
Issuers would need to back their stablecoins at least 1:1 with high‑quality liquid assets, such as cash and short‑term U.S. Treasuries. They must redeem tokens at par, provide regular public reports on reserves, and submit to independent audits and OCC examinations.
The draft also sets conditions for foreign issuers that want access to U.S. users. Only “permitted foreign payment stablecoin issuers” that meet equivalent standards and gain OCC approval would be allowed; others could be gradually pushed out of the regulated U.S. market.
Ban on Stablecoin Yield and Market Reaction
One of the most closely watched parts of the proposal is a ban on paying yield or interest on stablecoin balances held with the issuer. The OCC says payment stablecoins should work like cash or stored‑value, not like deposit accounts or investment products, so ongoing rewards on idle balances would not be allowed.
The draft rule does not stop separate banks or platforms from offering returns on funds they hold, but it bars the core stablecoin issuer from marketing yield as part of the token itself. This could pressure some existing models that blur the line between payment tokens and savings products.
Industry groups, including the American Bankers Association, have welcomed the OCC’s move as an important step toward clearer federal oversight, while requesting flexibility on reserve requirements and technology choices. In the meantime, cryptocurrency companies are currently examining how the regulations will affect DeFi systems that depend on existing stablecoins.
Following publication in the Federal Register, the OCC will accept comments for 60 days. It specifically asks for feedback on reserve requirements, foreign issuer access, the yield ban, and how to treat tokenized bank deposits versus stand-alone stablecoins.
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