OCC Finalizes GENIUS Act Rules for Stablecoins, Sidesteps Rewards Debate

The Office of the Comptroller of the Currency set its final stablecoin rules under the GENIUS Act on Wednesday, making it the first federal regulator to wrap up the framework that Congress approved in July 2025. The regulation becomes effective on January 18, 2027.

Federal standards introduced by the rules govern payment stablecoin issuers on matters including reserve backing, redemptions, capital, custody, audits and risk management. A licensing and supervisory structure is created for national banks, their subsidiaries, nonbank firms and foreign issuers within the OCC's remit.

Comptroller Jonathan Gould said in a statement the agency is "providing a clear, practical framework for payment stablecoin innovation, with strong standards for reserve backing, redemption, and risk management." He added that the rule advances "President Trump and Secretary Bessent's vision for American leadership in digital assets."

The GENIUS Act, passed and signed into law last year, marked the first federal statute to regulate stablecoins — the dollar-pegged tokens that serve as the primary trading pair for bitcoin on most exchanges.

The legislation mandated one-to-one reserve backing and annual audits, instructing bank regulators to craft the implementing rules. The Federal Reserve and FDIC have put forward proposals, while Treasury is working on its own.

Rewards fight left unresolved

The most significant shift from an earlier February proposal lies in what the agency removed.

Under the GENIUS Act, issuers are prohibited from paying interest or yield to stablecoin holders. Exchanges and other third parties that offer rewards on stablecoin balances are not addressed by the statute. Banking groups have called this the "stablecoin loophole" and lobbied for months to close it, contending that token yield could siphon deposits and weaken lending.

In the proposed rule, certain arrangements between issuers and third parties would have been treated as presumed violations of the ban. The final version drops that presumption in favor of a case-by-case approach.

An OCC official told reporters the agency would "just let the market develop and address it as it comes," declining to say whether existing exchange rewards programs comply with the rule while noting the agency has authority to pursue clear evasions of the ban, according to Crypto in America.

The outcome is a setback for banks, which had looked to the OCC after the Clarity Act — the broader crypto market structure bill — failed a Senate procedural vote in September. Stablecoin yield was one of the central sticking points in those negotiations.

Stablecoin issuers get some flexibility on reserves

The final rule loosens several proposed restrictions on reserve management. A 20-day weighted-average maturity limit on reserve assets is scrapped, letting issuers hold longer-dated Treasuries. Surplus reserves may be withdrawn at any time rather than once a month, provided outstanding stablecoins remain backed one-to-one.

On redemptions, the agency removed a provision that would have extended deadlines during a surge in withdrawal requests. Issuers must instead notify the OCC within 24 hours if redemption requests exceed 10% of a stablecoin's outstanding value in a single day, per Crypto in America.

The OCC has not yet announced when it will begin accepting applications from prospective issuers. Anti-money laundering and sanctions rules will come in a separate rulemaking with the Treasury.