OCC Finalizes GENIUS Act Rule for Stablecoin Issuers, Effective 18 January 2027

The final rule drops the proposed presumption against yield paid through affiliates and third parties, cuts the minimum daily-liquidity holding to 5% of reserves and removes an automatic seven-day redemption extension. AML and sanctions rules will follow in a separate rulemaking.

By Margaret Liu, Journalist, CBDCs and Regulation

The Office of the Comptroller of the Currency (OCC) issued its final rule implementing the GENIUS Act on 21 October 2026. The rule sets the requirements for permitted payment stablecoin issuers and foreign payment stablecoin issuers under the OCC's jurisdiction, as well as certain custody activities by OCC-supervised entities. It takes effect on 18 January 2027, the same day as the GENIUS Act itself.

The rule is final, but the regime is not yet operating. The OCC said it will announce separately when it starts accepting and processing applications and waiver requests from prospective issuers. Rules on the Bank Secrecy Act, anti-money laundering and sanctions compliance are not included; they will come in a separate rulemaking coordinated with the Treasury Department.

What changed from the proposal

The OCC proposed the rule earlier this year (published in the Federal Register on 2 March 2026) and says it received about 328 comments. Three changes stand out in the final text.

Yield. The GENIUS Act bars an issuer from paying interest or yield to a holder solely for holding, using or retaining a payment stablecoin. The proposal would have added a rebuttable presumption that certain payments through affiliates and related third parties broke that ban. The final rule eliminates the presumption. The OCC says a payment through an intermediary may or may not fall within the ban "depending on the facts and circumstances," and that transaction-based payments which are not interest or yield, or are not made solely for holding the coin, would not be prohibited. It also declined to create safe harbors for white-label partners or for arrangements that are securities.

Liquidity. Issuers must keep at least 5% of reserve assets in demand deposits, on-demand share-account funds or balances at a Federal Reserve Bank. The proposal set this at 10%. The OCC says it lowered the figure because the final rule adds stress-testing requirements and foreign-exchange risk management to the issuer risk-management section.

Redemption. The proposal included an automatic seven-day extension of redemption deadlines during a spike in requests. The OCC removed it, agreeing with commenters that it "could prove pro-cyclical and trigger or exacerbate runs." Issuers must instead notify the OCC of a sudden spike in redemption requests. Timely redemption still means no more than two business days after the requested redemption date, and the OCC declined to give cross-border redemptions a longer window.

The OCC also declined to add a capital buffer or a phase-in period for new issuers to meet minimum capital.

Why the yield decision matters

Yield is the most contested commercial question in US stablecoin policy. Bank trade groups argue that rewards routed through exchanges or other partners would pull deposits out of the banking system. Many commenters on the proposal, by contrast, asked for a narrow ban that would not catch third-party payments made for reasons other than simply holding the coin. By replacing a presumption with case-by-case review, the OCC has left room for partner reward programmes without approving any of them. Each arrangement will be tested on its facts once supervision begins.

The Independent Community Bankers of America said it remains focused on "robust implementation of Congress' intent to prohibit the payment of yield or interest to payment stablecoin holders," according to Banking Dive.

What happens next

Three things still stand between the rule and a working licensing regime: the OCC's announcement on applications, the separate AML and sanctions rule, and the final rules of the other GENIUS Act regulators. The Federal Reserve's GENIUS Act issuer rules, for example, remain proposals. Alongside the rule, the OCC published two paperwork notices covering licensing and registration applications and weekly and quarterly reporting forms for issuers. Both invite public comment.

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