OCC finalizes regulatory framework to implement GENIUS Act

The Office of the Comptroller of the Currency (OCC) issued a 721-page release to adopt the final rule implementing almost all aspects of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act or the Act) that fall within the OCC’s jurisdiction. Both the GENIUS Act and the final rule will take effect on January 18, 2027. As with the OCC’s proposed rule, the Act’s Bank Secrecy Act/anti-money laundering (BSA/AML) and sanctions compliance requirements are being addressed in a separate rulemaking, which the OCC proposed in June 2026.

The final rule preserves the proposed rule’s architecture: a new 12 C.F.R. part 15 governing permitted payment stablecoin issuers (PPSIs) and foreign payment stablecoin issuers subject to the OCC’s jurisdiction, together with targeted amendments to the OCC’s capital, prompt corrective action, assessment and enforcement rules.

The OCC nonetheless made a number of significant changes. In general, those changes give issuers more flexibility, trading several of the proposed rule’s bright-line quantitative requirements for principles-based standards, such as those related to new stress testing, monetization and reserve buffer obligations. We have prepared a redline comparison of the proposed rule to the final rule, available here. See our earlier client updates on the GENIUS Act and the OCC’s proposed rule.

In our view, the final rule reflects a deliberate choice to put a workable framework in place before the Act’s effective date while leaving several of the most contested questions to be resolved through licensing, supervision, interpretive guidance and future rulemaking. These include the outer bounds of the yield prohibition, the treatment of white-label and multi-brand issuance, multi-jurisdictional issuance and collateral trustee structures. As a practical matter, the licensing process will carry significant weight: many issues that the proposed rule would have resolved in rule text will instead be addressed through application-specific conditions. 

The OCC is the first agency to finalize its rules. As a result, the final rule is likely to serve as a reference point for the FDIC, the Federal Reserve and the NCUA as they complete their own GENIUS Act rulemakings. Each of these other agencies’ proposed rules includes some notable differences from the OCC’s final rule.

Key takeaways

• Yield presumption eliminated. The final rule drops the proposed rule’s rebuttable presumption that arrangements with affiliates and “related third parties” (including white-label partners and yield-as-a-service providers) violate the Act’s prohibition on paying interest or yield to holders, and instead simply restates the statutory prohibition. The OCC emphasized that it retains its anti-evasion authority, declined to adopt any safe harbors and will evaluate arrangements case by case through licensing and supervision. In contrast, the Federal Reserve’s and the FDIC’s proposals would adopt a rebuttable presumption that an issuer is paying prohibited yield where it pays interest or yield to an affiliate or related third party (including yield-as-a-service providers and white-label partners) that passes yield on to holders. 
• Simplified reserve diversification. The final rule pairs a principles-based standard with two mandatory quantitative requirements: (1) at least 5% of reserve assets (reduced from 10%) must be held as demand deposits, share accounts payable on demand or Federal Reserve Bank balances and (2) a 40% limit on exposure to any single counterparty, excluding the U.S. government, appropriate custodians and centrally cleared repo. The proposed rule’s 30% weekly liquidity requirement, 20-day weighted average maturity cap and minimum insured deposit requirement for large issuers have been eliminated in favor of new monetization, stress testing and buffer requirements. As under the proposed rule, a reserve shortfall still results in a bar on new issuance and, after 15 consecutive business days, triggers mandatory liquidation and redemption. The final rule differs from the Federal Reserve’s proposal, which would not set a numeric cap or floor on reserve asset types and would require PPSIs to submit a remediation plan within 24 hours of a shortfall and to begin liquidating reserves and redeeming coins by 5:00 p.m. on the following business day if the shortfall is not remediated. In contrast, the FDIC would require only a discretionary response from the regulator with no built-in timeline.
• No automatic redemption delay. The final rule retains a two-business-day outer limit for timely redemption, with new clarity on when the redemption clock starts and stops. The proposed rule’s mandatory seven-day extension of the redemption period when redemption requests exceed 10% of outstanding issuance in a 24-hour period has been eliminated as potentially triggering or exacerbating runs. Issuers instead must notify the OCC within 24 hours and may request an extension. 
• Simplified capital. The OCC retained its individualized approach to capital and declined to adopt standardized risk-based components or buffers. In contrast to the proposed rule, regulatory capital will be based on GAAP tangible equity (with deductions for goodwill, other intangible assets and deferred tax assets) rather than bank-style common equity tier 1 and additional tier 1 capital. The final rule also retained the requirement to hold highly liquid assets equal to 12 months of total expenses as an operational backstop, separate from reserves. Up to 50% of the 12-month operational backstop may be funded with qualifying subordinated debt, the $5 million capital floor now applies beyond the de novo period and compliance must be maintained at all times rather than measured only at quarter-end. The requirement that a parent bank deconsolidate its PPSI subsidiary was adopted largely as proposed. In contrast, the Federal Reserve would set standardized capital charges without an operational backstop. The FDIC’s proposal is closer to the OCC’s approach and would require new issuers to hold the greater of their approved amount or $5 million for 36 months, followed by an issuer-set risk-based minimum and a backstop equal to 12 months of expenses.
• Multi-brand and SPV issuance accommodated. The OCC declined to adopt a “one issuer, one brand” restriction and revised the rule to facilitate structures that use separate special purpose vehicle (SPV) issuers. White-label and multi-brand arrangements will be evaluated on a case-by-case basis at licensing. In contrast, the Federal Reserve is considering a single-brand limit or a separate reserve subsidiary for each brand, and would allow reserves to be held through a no-liability, wholly owned SPV, while the FDIC would allow multiple brands but require segregated per-brand reserve pools unless it approves commingling in writing, and has asked for comment on whether to require a bankruptcy-remote vehicle.
• Expanded permissible activities. New enumerated activities include holding non-payment stablecoin digital assets as principal to pay network and customer fees or for testing, collateral trustee arrangements for reserve assets, foreign exchange risk management (with prior OCC approval) and hiring third parties such as investment advisers. The OCC also broadened its reading of the rehypothecation exception to permit standard custodial liens.
• Licensing and waiver procedures. Although the proposed rule declined to add review factors beyond those in the statute, the final rule adds a factor assessing whether an applicant’s proposed structure adequately addresses run risk and ensures its ability to redeem. The final rule also expressly provides for conditional approvals, although unlike for bank chartering, a firm that receives conditional approval may begin operations immediately upon approval (subject to whatever conditions the approval contains). The OCC will announce separately when it will begin accepting applications and waiver requests, which it intends to do before the Act’s effective date. Concurrent guidance states that the OCC generally expects to grant waivers from the Act’s licensing requirement to existing U.S. issuers that have submitted a substantially complete application by January 18, 2027, but has not identified generally applicable reasons to waive other requirements or to grant waivers to issuers not already operating in the United States.
• Shorter extended examination cycle. The extended examination cycle for small issuers has been shortened to 18 to 24 months (from 18 to 36 months), and the $1 billion eligibility threshold is now measured together with affiliated PPSIs.
• Several frameworks finalized largely as proposed. These include the framework for nonbank state issuers that exceed $10 billion in outstanding issuance; custody requirements; the registration framework for foreign payment stablecoin issuers; and the OCC’s asset-based assessment methodology. 

Key recommendations

• Start the licensing process now. With the Act effective January 18, 2027, prospective issuers, including existing issuers that intend to rely on the safe harbor for pending applications, should prepare applications in advance of the OCC’s announcement that it is accepting filings. Prospective issuers must have a substantially complete application pending with the agency on or before January 18, 2027 to rely on the safe harbor. The OCC will notify applicants within 30 days of receiving an application of whether it is substantially complete, so prospective issuers that plan to rely on the safe harbor should file as early as possible once the OCC begins accepting applications. The registration and licensing application forms have not been officially released but are available on the Office of Management and Budget (OMB) website and are awaiting approval. Applicants should anticipate that the new safety-and-soundness factor and conditional approvals will be the primary tools through which the OCC addresses structural questions, such as multi-brand issuance, SPVs, distribution arrangements and multi-jurisdictional issuance.
• Review rewards and distribution arrangements. The elimination of the yield presumption removes a bright-line burden but provides no safe harbor. Issuers and their partners should evaluate rewards, revenue-sharing and white-label economics against the OCC’s substance-over-form approach and its statements regarding agents, evasion and bona fide services.
• Build out reserve, liquidity and stress testing capabilities. The shift from fixed limits to monetization, stress testing and buffer requirements places a premium on documented methodologies, tested monetization channels and board-level reporting. Issuers should also put in place the custodian notifications, Section 10 commitments and ongoing monitoring needed to rely on the custodian exclusion from the 40% limit.
• Prepare redemption operations for stress. Issuers should confirm that onboarding procedures are reasonably designed not to unduly delay redemption, including in a surge, update disclosures to reflect the new required statements and establish escalation processes for the 24-hour notice requirement.
• Recalculate capital and operational backstop. Issuers should model capital on a GAAP tangible equity basis with the new deductions, model the operational backstop requirements, consider whether third-party subordinated debt can efficiently fund part of the operational backstop and implement daily monitoring and 24-hour notification processes. Bank parents should implement the part 3 deconsolidation adjustments, and uninsured national trust banks should decide whether to seek approval to elect the part 15 framework.

Summary of the final rule

Purpose, scope and key definitions

Like the proposed rule, the final rule adds a new part 15 to the OCC’s regulations and makes revisions to 12 C.F.R. parts 3 (capital), 6 (prompt corrective action), 8 (assessments) and 19 (rules of practice and procedure). The OCC has jurisdiction over several types of PPSIs, which we refer to as OCC PPSIs:

• Subsidiaries of insured national banks and federal savings associations (FSAs);
• Federal qualified payment stablecoin issuers (i.e., OCC-approved nonbank entities, uninsured national banks and federal branches of foreign banks); and
• State qualified payment stablecoin issuers that are nonbank entities and exceed $10 billion in total consolidated outstanding issuance (unless an issuer receives a waiver).

The OCC also has jurisdiction over foreign payment stablecoin issuers that register with the OCC and over certain custody activities of national banks, FSAs, federal branches of foreign banks and OCC PPSIs. In response to commenters concerned that the rule could reach blockchain infrastructure providers, technology vendors and other service providers, the OCC confirmed that part 15 applies only to entities within these categories. A service provider that is not obligated to redeem a payment stablecoin is not a PPSI.

The OCC adopted most definitions as proposed, but added, removed or revised several in ways that have practical consequences:

• Affiliate and control (unchanged). The Bank Holding Company Act-based definitions of “affiliate” and “control” were adopted as proposed. The OCC stated that it generally expects to interpret these terms consistent with the Federal Reserve’s Regulation Y, “including those relating to controlling influences and to the presumption of control,” as of the date of issuance of the final rule. Changes in control continue to be governed by the OCC’s Change in Bank Control Act regulations (12 C.F.R. § 5.50). The OCC declined to define “acting in concert” but expects that persons acting in concert under § 5.50 will be treated as such for change-in-control purposes. As we noted with respect to the proposed rule, the Federal Reserve’s control presumptions will therefore continue to define a broad universe of affiliates for purposes of part 15’s affiliate transaction standards and the OCC’s authority to impose additional capital requirements.
• Customer (narrowed). A “customer” is now limited to a person that purchases products or services directly from the issuer or requests directly that the issuer redeem a payment stablecoin. A holder that acquires a payment stablecoin from a third-party distributor (including a white-label partner) that is not acting as the issuer’s agent is not a customer unless and until it seeks to redeem from the issuer. This change meaningfully narrows the scope of the rule’s customer information security and notification requirements.
• Payment stablecoin holder (new). The term is defined as the beneficial owner of a payment stablecoin, distinguishing persons that merely control a coin on another’s behalf (such as custodians) from those that benefit economically. 
• Outstanding issuance value (revised). The definition now refers to the total par value of payment stablecoins issued by the PPSI, without the word “consolidated,” so that each SPV issuer need only hold reserves against its own stablecoins. The OCC also clarified that tokens minted but held in the issuer’s treasury, and tokens repurchased but not burned, are excluded, while tokens frozen pursuant to law or court order remain included. Issuance by non-consolidated affiliates is generally excluded, although the OCC may consider including such issuance where an arrangement suggests evasion (for example, a state issuer that treats affiliate-issued stablecoins as fungible with its own to stay below the $10 billion federal transition threshold). “Total consolidated” outstanding issuance continues to be used for statutory thresholds, such as the $10 billion state transition and $50 billion audit thresholds.
• Reserve asset value (new). Reserve assets are measured at fair value, net of associated liabilities, except that U.S. coins and currency are measured at face value. The netting concept is particularly relevant for repo: an issuer that pledges a reserve Treasury in a repurchase agreement counts the cash received but must subtract its repurchase obligation.
• Tokenized form (new). An asset is in tokenized form if its authoritative record is maintained on distributed ledger technology and it confers legal rights “identical” to those of the non-tokenized asset. The definition is generally consistent with the interagency FAQ on tokenized securities (see our client update) and covers both digitally native instruments (e.g., a money market fund issued directly on a distributed ledger) and tokens representing traditionally issued assets.
• United States customer (revised). Status is now determined at onboarding: an individual residing in the United States (including any U.S. citizen), an entity organized under U.S. or state law or an entity with its principal place of business in the United States.
• Depository institution (revised). With respect to credit unions, the definition now covers only insured credit unions, with the result that non-federally insured credit unions are nonbank entities that may apply to become federal qualified payment stablecoin issuers. 
• Other changes. The final rule adds a definition of “business day” (excluding weekends and federal holidays), revises “private key” to cover sharded and multi-party computation architectures, excludes information broadly accessible on a distributed ledger (such as public wallet addresses) from nonpublic personal information, adds a definition of “sensitive customer information” and drops the definition of “trading volume.”

The OCC also offered several interpretive points of note. A “wrapped” stablecoin that is redeemable for a payment stablecoin, rather than for monetary value, generally is not itself a payment stablecoin. Payment stablecoins must be redeemable at par. The OCC also stated that the final rule does not alter the scope of existing consumer protection laws (such as the Electronic Fund Transfer Act and the Truth in Lending Act) that may apply to PPSIs, without specifically opining on whether they do apply.

Relationship to the GENIUS Act’s self-executing provisions

The OCC reiterated the views expressed in the proposed rule. The OCC explained that Section 4(b)(1) of the Act gives the OCC exclusive visitorial authority over federal qualified payment stablecoin issuers; Section 5(h) preempts state charter and licensing requirements for federal qualified issuers and OCC-approved subsidiaries of insured depository institutions (IDIs); and Section 7(f)(4) preserves state consumer protection laws, though other federal law, such as the National Bank Act, may also be relevant. Commenters asked the OCC to address whether the Act preempts state licensing of third-party service providers, foreign issuers and activities beyond core issuer activities, and to confirm that the OCC also has exclusive visitorial authority over bank-subsidiary PPSIs. The OCC declined to address these comments, stating that it prefers to retain flexibility to address these questions on an individualized basis as they arise, and invited stakeholders to contact the agency directly.

OCC PPSIs

Permitted and prohibited activities

The final rule expands the list of permitted activities for PPSIs. The core activities from the proposed rule (issuing and redeeming payment stablecoins, managing reserves, providing custody for payment stablecoins, reserves and private keys, assessing fees, acting as principal or agent with respect to payment stablecoins and paying fees to facilitate customer transactions) were adopted as proposed. The final rule adds:

• Holding non-payment stablecoin digital assets as principal as necessary to pay customer and network fees or to conduct necessary testing on distributed ledger-based platforms, in quantities not exceeding those necessary for the reasonably foreseeable conduct of those activities, consistent with OCC Interpretive Letter 1186. The OCC declined to adopt a quantitative cap or a prior approval requirement. Issuers may accept fees in non-payment stablecoin digital assets but may hold them only for these purposes; the OCC expects most issuers to be able to divest any excess within one business day. Such assets can never be reserve assets. 
• Collateral trustee arrangements for reserve assets, including the grant of a security interest to a trustee, provided that (1) the security interest is for the sole benefit of payment stablecoin holders, (2) the arrangement does not impair timely redemption prior to default, (3) the arrangement does not introduce claims that compete with holders’ claims in the issuer’s insolvency and (4) the arrangement does not impair a receiver’s ability to direct the prompt transfer or liquidation of reserves to pay holders. The trustee may not be paid from the proceeds of the reserve collateral. The OCC declined to mandate disclosures or holder consent, stated that it will continue to evaluate whether these arrangements serve their intended purpose and is considering a separate rulemaking that could add conditions.
• Foreign exchange risk management, subject to new risk management requirements described below. The OCC confirmed the Act’s definition of “monetary value” contemplates payment stablecoins denominated in currencies other than the U.S. dollar.
• Hiring third parties. The “directly supporting” activities provision now expressly includes hiring third parties. The OCC confirmed that PPSIs may use investment advisers, asset managers and separately managed accounts for reserve assets, rejected commenters’ suggestion that “directly support” means “strictly necessary” and committed to a brand- and technology-neutral reading of that standard. Liquidity management also generally qualifies.
• Digital asset service provider activities. The final rule confirms that PPSIs may engage in digital asset service provider activities, and activities incidental thereto, to the extent “independently authorized” under federal law or state law not inconsistent with federal law. The OCC reiterated that Section 4(a)(7)(B) of the Act is not an independent grant of authority and declined to create a separate approval process, again inviting issuers to seek clarification directly from the agency.

The OCC also confirmed that PPSIs may repurchase their own payment stablecoins in the secondary market, provided doing so does not impair their redemption obligations or capital and liquidity compliance, and that holding payment stablecoins as principal to facilitate customer transactions likely falls within the principal-or-agent authority (although payment stablecoins are not eligible reserve assets). 

With respect to national trust banks, the OCC stated that the final rule does not change their permissible activities: a national trust bank PPSI must satisfy both national bank and PPSI requirements and its activities must constitute trust company operations or related activities. The OCC declined a request to rescind prior national trust bank approvals, explaining that those approvals were properly granted under 12 U.S.C. §§ 27(a) and 92a and that the inclusion of uninsured national banks in the Act’s definition of federal qualified payment stablecoin issuer “is a clear indication that Congress intended for national trust banks to be able to apply to be permitted payment stablecoin issuers and to issue payment stablecoins.” See our client update on the OCC’s national trust bank final rule.

The final rule adopted as proposed the prohibitions on giving a payment stablecoin a deceptive name (while clarifying that abbreviations that include “USD” remain permissible); marketing a payment stablecoin as legal tender or as issued, guaranteed or approved by the United States; and representing that a payment stablecoin is federally backed or federally insured. The prohibition on pledging, rehypothecating or reusing reserve assets was also adopted largely as proposed, with several notable clarifications:

• An IDI that receives deposits from a PPSI may deploy or invest those deposits without running afoul of the prohibition.
• In a change from the proposed rule’s potentially narrower reading, a PPSI may grant a custodian a first-priority lien, security interest and set-off rights against reserve assets to the extent necessary for the bona fide provision of standard custodial services.
• Limited liens granted to a Treasury clearing agency in lieu of margin, and liens granted to a clearing member that holds related cash and securities in a custodial capacity, are generally consistent with the margin and custodial services exceptions.
• The OCC’s pre-approval of repurchase agreements in which the Treasury bills sold have a maturity of 93 days or less is now codified in a standalone provision. The OCC declined to extend pre-approval to other repo, reiterated that it will not trace the use of repo proceeds and confirmed that the repo counterparty may also be the custodian of the relevant reserves.

Finally, the OCC retained the general prohibition on activities that the OCC determines to be an evasion of Section 4 of the Act or part 15 and declined to provide a good-faith reliance safe harbor.

Interest and yield prohibition

The treatment of the yield prohibition may be one of the final rule’s most closely watched changes. Section 4(a)(11) of the Act prohibits a PPSI or foreign payment stablecoin issuer from paying holders “any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention” of a payment stablecoin. The proposed rule would have implemented this prohibition with a rebuttable presumption covering arrangements under which an issuer pays interest or yield to an affiliate or “related third party” that, in turn, pays interest or yield to holders. As described in our earlier client update, “related third parties” would have included yield-as-a-service providers and white-label partners.

Commenters were sharply divided. Many urged the OCC to eliminate or narrow the presumption, arguing that the statute reaches only payments by issuers and that Congress deliberately declined to prohibit indirect payments. Many others, including banking groups citing the risk of deposit outflows from community banks, urged the OCC to broaden the presumption or to prohibit indirect payments outright. The final rule eliminates the rebuttable presumption and the related definitions entirely and simply restates the statutory prohibition (which the final rule applies equally to foreign payment stablecoin issuers). The OCC explained that, in a nascent market, the presumption could have been both overinclusive and underinclusive.

The elimination of the presumption is not, however, a safe harbor for indirect payments. The OCC’s commentary makes clear that it intends to apply the statute with a focus on substance:

• Anti-evasion authority applies. The OCC rejected the argument that its anti-evasion authority under Section 4(h)(1) does not extend to the yield prohibition, noting that the prohibition is a requirement of Section 4 and therefore subject to the Act’s anti-evasion provision by its terms.
• Some indirect payments are covered. Payments made by an agent on the issuer’s behalf are within the scope of the prohibition, and it would “clearly evade” the prohibition for an issuer to pay another entity to make a payment that the issuer could not make directly. Other arrangements may present closer questions.
• “Solely” given its plain meaning, but substance governs. Payments made for reasons other than holding, using or retaining a payment stablecoin are outside the scope of the prohibition. However, where an issuer pays interest or yield only nominally for another purpose, the OCC will look to the substance of the transaction to determine whether it was structured to evade the prohibition.
• No definitions of key terms. The OCC declined to define “interest,” “yield,” “pay,” “holding,” “use” or “retention,” noting that definitions could encourage arrangements designed to evade the prohibition and that “[i]nterest does not stop being interest merely because it is given a different name.” 
• No safe harbors. The OCC declined to adopt safe harbors for de minimis payments, rewards programs that predated the Act, DeFi arrangements, arrangements that are securities or white-label partners. On the last point, the OCC observed that payments to and from white-label partners “may be more likely to be made on behalf of” an issuer. Absent additional facts to the contrary, however, the OCC stated that “payments for bona fide services generally would not be prohibited.”
• Scope. The prohibition applies equally to retail and institutional holders, does not apply to interest on deposits (including tokenized deposits) and includes no cure period.

Rather than issue guidance on particular arrangements, the OCC will monitor arrangements through its review of applications and ongoing supervision, take action and issue public guidance where it identifies violations or evasion, and anticipates proposing a rulemaking to clarify the prohibition once it has gained sufficient experience. The OCC also stated that it will evaluate whether amendments to the final rule are necessary if Congress amends the Act or enacts legislation, such as market structure legislation, that clearly relates to the yield prohibition.

For exchanges, wallet providers, white-label partners and other distribution partners, the removal of the presumption eliminates the burden of rebutting a presumed violation. The practical effect, however, is to shift these questions into the licensing and supervisory process. Applicants should expect the OCC to examine distribution, revenue-sharing and rewards arrangements closely, and arrangements under which the issuer funds or directs payments to holders, or in which economics track the holder’s balance, are likely to attract the most scrutiny.

White-label, multi-brand, SPV and multi-jurisdictional issuance

The proposed rule requested comment on whether to limit each PPSI to a single brand of payment stablecoin, with a streamlined licensing process for affiliates of approved issuers. The OCC has not adopted a one-brand-per-issuer requirement, citing the burden on issuers (particularly smaller issuers and nonbank fintech issuers that rely on white-label distribution) and the absence of a clear statutory mandate. At the same time, the OCC stated that a one-brand-per-issuer structure “may better protect the rights of payment stablecoin holders” by keeping each brand’s reserves legally separate and reducing contagion risk. It therefore revised the rule to accommodate structures that use multiple SPV issuers:

• The revised definition of outstanding issuance value means that each SPV is required to hold reserves only against its own stablecoins.
• Separate monthly composition reports are required for each SPV issuer, and the $1 billion extended examination threshold is measured together with affiliated PPSIs so that SPV structures are not used to obtain less stringent supervision.
• The OCC anticipates that licensing an additional SPV will be less burdensome than an initial license because applicants may leverage prior applications, and an SPV may rely on its parent’s risk management framework if that framework satisfies part 15.
• However, a PPSI license is not a group-wide authorization: an affiliate that issues the same token under the same brand and reserve framework but is a different issuer must obtain its own license.

For a single issuer that issues multiple brands, the final rule does not require brand-level reserve segregation. Where brands are backed by distinct reserve pools, however, the monthly composition report must present a separate table for each and describe the legal and operational mechanisms by which the assets are separately secured. The OCC expressly declined to follow the FDIC’s proposal, which would require multi-brand issuers to maintain segregated reserve pools unless the FDIC approves commingling in writing. Instead, the OCC will evaluate at licensing whether holders are adequately protected and may impose conditions, considering mechanisms such as segregated custodial sub-accounts, trusts and statutory cell structures. A single brand issued on multiple blockchains may be backed by a single reserve pool.

The OCC similarly declined to address multi-jurisdictional issuance in rule text, deferring to Treasury’s authority over comparability determinations and reciprocal arrangements under Section 18 of the Act and indicating that it will evaluate such arrangements on a case-by-case basis. The OCC emphasized that reserve rebalancing among a PPSI and its foreign affiliates must preserve full backing of the PPSI’s outstanding issuance at all times and declined to permit a longer redemption period for cross-border redemptions.

The OCC’s approach is a meaningful accommodation for white-label and distribution-led business models, but the flexibility comes through licensing rather than rule text. Applicants should be prepared to explain how their structure segregates reserves, how stress affecting one brand is contained and how holders of each brand would be treated in insolvency. Until the FDIC and Federal Reserve finalize their respective rules, issuers should also be alert to potential differences among the agencies’ approaches.

Reserve asset requirements

Composition. The list of eligible reserve assets is unchanged and continues to track the Act. Eligible reserve assets consist of U.S. coins and currency and Federal Reserve Bank balances; demand deposits (or other deposits withdrawable at any time) at insured depository institutions; Treasury bills, notes and bonds with a remaining maturity of 93 days or less; funds received under overnight repurchase agreements collateralized by Treasury bills with a maturity of 93 days or less, and overnight reverse repurchase agreements collateralized by Treasury bills, notes or bonds; shares of registered investment companies, including government money market funds, that invest solely in these assets; other similarly liquid federal government-issued assets approved by the OCC; and any of these assets in tokenized form. The OCC provided several clarifications in the final rule:

• Demand deposits. The final rule tracks the statutory phrase “funds held as demand deposits (or other deposits that may be withdrawn upon request at any time).” A deposit that permits the bank to require prior notice of withdrawal, or limits the number of withdrawals, does not qualify, even if it would be a demand deposit under Regulation D or other law.
• Insured depository institutions only. Deposits must be held at IDIs (including their foreign branches, agents and correspondents). The OCC interprets this requirement to mean that uninsured U.S. branches and agencies of foreign banks are not IDIs, so their deposits are not eligible reserve assets, although they may act as custodians if they satisfy Section 10 of the Act. Uninsured deposits at IDIs remain eligible. Deposit placement networks may be used if they do not impede timely redemption.
• Treasuries. Floating rate notes, Treasury Inflation-Protected Securities and STRIPS with a remaining maturity of 93 days or less are eligible. There are no quantitative limits on Treasury holdings, but issuers are expected to consider the liquidity of particular securities, such as off-the-run issues.
• Funds. Shares of any investment company registered under Section 8(a) of the Investment Company Act, including exchange-traded funds, that invest solely in eligible reserve assets qualify. A fund that invests in other funds does not qualify, and “other registered government money market funds” does not expand eligibility beyond registered funds.
• Other assets. When approving “other similarly liquid federal government-issued assets,” the OCC may impose conditions (e.g., maturity limits). Corporate debt, including AAA-rated corporate debt, is not eligible.
• Tokenized reserves. The OCC declined to impose a broad-based haircut on tokenized reserve assets but noted that a haircut may be appropriate under an issuer’s own liquidity risk management, depending on the asset’s design and operational characteristics.

One-to-one backing at all times. The OCC rejected requests to permit temporary intraday shortfalls arising from settlement timing, emphasizing that reserve asset value must equal or exceed outstanding issuance value at all times, not merely at end of day. Because outstanding issuance value is measured at par, an issuer must maintain full backing, with reserve assets measured at fair value, even if the issuer’s coin de-pegs in the secondary market.

Monetization and buffers. The final rule codifies the proposed rule’s preamble expectations on monetization. Issuers must demonstrate the operational capability to access and monetize reserve assets to meet redemptions under both normal and adverse economic, liquidity, market and interest rate conditions, taking into account market access, financing channels, haircut assumptions and operational readiness. The preamble indicates that larger or more complex issuers may need multiple monetization channels and periodic test transactions. A new provision requires issuers to ensure that reserve asset value will continue to equal or exceed outstanding issuance value at all times and that the reserve portfolio can support timely redemption under both normal and adverse conditions, “including, to the extent necessary, maintaining a buffer” of excess reserves. No buffer level is specified. A portfolio of immediately available liquidity may require little or no buffer, while longer-duration portfolios may require a more substantial one; the OCC cited an early-1980s interest rate shock, under which a 90-day bill would have lost roughly 0.79% of its value, as a plausible adverse scenario.

Withdrawals of excess reserves. Responding to concerns that the proposed rule’s once-a-month withdrawal limit would discourage overcollateralization, the final rule permits issuers to withdraw excess reserves at any time after appropriate due diligence confirms that the withdrawal will not cause reserve asset value to fall below outstanding issuance value. Income earned on reserve assets is not subject to this limitation and may be directed outside the reserve portfolio. The OCC also confirmed that a bank holding reserve deposits or custodying reserves is not obligated to monitor one-to-one backing unless it agrees to do so by contract.

Diversification and concentration. The OCC adopted a hybrid of the proposed rule’s two options. Option A under the proposed rule would have consisted of a principles-based general requirement and an optional safe harbor containing quantitative requirements. Option B would have made the quantitative requirements mandatory for all OCC PPSIs. Under the final rule, all issuers remain subject to Option A’s principles-based requirement to maintain sufficiently diverse reserves and to manage the risk of concentration at one or a small number of eligible financial institutions, and the final rule adds that some issuers may need to exceed the quantitative minimums or hold reserves in excess of outstanding issuance value to comply. The OCC expects that every issuer will need to maintain multiple reserve asset types, if only as a backup to its primary reserve asset. Depending on their business model and risk profile, some issuers may need more robustly diverse reserves. For example, the OCC stated that a large issuer with complex operations may need to maintain deposits with multiple eligible financial institutions, as well as a stock of Treasury bills potentially custodied with more than one eligible financial institution, to ensure that its reserves can be monetized during periods of financial stress. According to the OCC, factors that could increase an issuer’s operational complexity and weigh in favor of maintaining multiple pools of reserve assets include the number of parties that redeem directly with the issuer, the volume and volatility of redemptions and the number and nature of the blockchains on which the payment stablecoin trades. Alongside the principles-based standard, the OCC adopted a reduced set of Option B’s quantitative requirements:

The OCC explained that it lowered the daily liquidity minimum because the new monetization and stress testing requirements will necessarily require issuers to maintain capacity to meet short-term redemptions, and because issuers holding large Treasury positions with established monetization channels may not need more immediately available cash. The OCC also acknowledged that an issuer drawing on deposits to meet redemptions in a stress event may temporarily fall below 5%, and stated that it will consider the totality of the circumstances before taking supervisory action, provided the issuer rebalances as soon as practicable.

Several features of the revised 40% counterparty limit are worth noting:

• Federal Reserve Bank balances count. Although Reserve Banks should present no credit risk, the OCC declined to exclude them, reasoning that preferential treatment could encourage issuers to move reserves out of commercial banks and into Reserve Banks in times of stress, with potential effects on money market volatility and monetary policy transmission.
• Direct holdings and affiliates. Reserve assets held directly by the issuer are not subject to the limit because an issuer cannot be its own counterparty. Self-custody and custody at an affiliate remain permitted, but non-custodial exposures to an affiliate, such as deposits at an affiliated bank, are subject to the limit.
• Appropriate custodians. Custodial exposures to an eligible financial institution are excluded from the limit if the issuer (1) identifies itself to the custodian as a PPSI; (2) ensures that the custodian commits to adhering to Section 10 of the Act and implementing regulations and (3) conducts appropriate due diligence and ongoing monitoring of its custodial arrangements to ensure compliance with applicable requirements of the Act and implementing regulations. The OCC agreed with commenters that limits on custodians could fragment reserves and add operational risk, and expressed the view that substantive oversight of custodians is more effective than mechanical diversification. Custodians should expect to receive PPSI notifications and requests for Section 10 commitments in onboarding.

The OCC also declined to exempt subsidiaries of IDIs or smaller issuers from these requirements and declined to mandate or discourage the placement of reserves at community banks.

Minimum insured deposit requirement eliminated. The proposed rule would have required issuers with $25 billion or more in outstanding issuance to hold at least 0.5% of reserves (up to $500 million) in insured deposits. The OCC dropped this requirement, agreeing with commenters that the operational risk of spreading small balances across many banks outweighed the credit risk benefit. The OCC noted that the FDIC has separately proposed that reserve deposits be insured to the issuer as corporate deposits, without pass-through coverage to holders.

Monthly reports and consequences of shortfalls. The monthly composition report, registered public accounting firm examination and CEO/CFO certification requirements were adopted largely as proposed. The template has been revised to report reserve asset value net of repurchase liabilities, to list tokenized reserves separately and to require per-brand or per-SPV reporting where applicable. The OCC declined to require random-day attestations or to mandate particular attestation criteria, and the CEO/CFO certification is submitted to the OCC and may be published. The consequences of a reserve shortfall (an immediate bar on new issuance and mandatory liquidation and redemption after 15 consecutive business days, which the OCC may extend) were retained, but the OCC may now permit an under-reserved issuer to continue issuing. The OCC may also require a remediation plan, or order redemption of all outstanding coins, if an issuer faces a significant risk of being unable to regain compliance.

Redemption

The final rule retains the two-business-day outer limit for timely redemption and the requirement that an issuer redeem any amount of one payment stablecoin or more, subject to customer screening and onboarding. The OCC rejected arguments that issuers may limit redemption to institutional counterparties or authorized participants, explaining that the obligation to redeem runs to any holder. An issuer need not focus on retail customers, but it must be able to redeem from them and should have procedures in place to onboard them, particularly in times of stress. Issuers may, however, adopt fee schedules with discounts for bulk redemptions or new customers.

Key changes include:

• Automatic extension eliminated. The proposed rule’s mandatory seven-day extension when redemption requests exceed 10% of outstanding issuance in a 24-hour period has been eliminated. The OCC agreed with commenters that an automatic extension could be pro-cyclical and could trigger or exacerbate runs. An issuer must instead notify the OCC within 24 hours when requests for any brand exceed that 10% threshold and may request an extension, which the OCC may grant or deny, or the OCC may impose its own discretionary limitations under the Act. The OCC expects to use this authority “sparingly” and that extensions will be rare.
• When the clock starts and stops. The redemption obligation begins when the issuer receives a redemption order from a customer and, if the issuer’s onboarding procedures are reasonably designed not to unduly delay onboarding (including in times of stress), when the customer has been successfully onboarded and other legal conditions to redemption have been met. Redemption is deemed to occur when the issuer has fully processed and initiated the outgoing transfer of monetary value, or credited the customer’s account with the issuer. Because the clock does not run while funds are in transit, the OCC declined to adopt a longer period for cross-border redemptions.
• Conflicts with other law. A new provision confirms that the OCC will not require an issuer to redeem where doing so would cause it to violate other applicable law, such as sanctions or BSA requirements.
• Additional disclosures. Issuers must disclose, in addition to the items in the proposed rule, that the payment stablecoin is not legal tender and is not issued, guaranteed or approved by the United States, and that it is not a deposit, is not backed by the full faith and credit of the United States and is not insured by the FDIC or the NCUA. Issuers must disclose a website that links to the monthly composition report, and fee changes require at least seven calendar days’ notice delivered to customers with a current relationship.

The onboarding condition is important. The OCC stated it is designed to prevent issuers from using deficient onboarding as a pretext to extend redemption timelines, and the OCC suggested that issuers disclose their onboarding processes and how those processes may affect timing. 

Risk management

The principles-based risk management framework, drawn from the OCC’s safety and soundness guidelines in 12 C.F.R. part 30, was adopted largely as proposed, with targeted additions:

• Monetization and stress testing. Issuers must ensure that the reserve portfolio as a whole can support timely redemption under normal and stressed conditions, including through analyses of a range of redemption scenarios; maintain and demonstrate to the OCC the ability to reliably access and monetize reserves; and engage in regular stress testing to confirm that reserves will continue to equal or exceed outstanding issuance value in stressed conditions, including in significant positive interest rate scenarios. The OCC adopted these requirements largely in response to commenters who urged stress testing in place of the proposed rule’s quantitative limits.
• Foreign exchange risk. An issuer of a non-U.S. dollar payment stablecoin must hedge any residual foreign exchange risk identified through stress testing so that it retains no more than minimal risk, may not take anticipatory or speculative positions, must maintain policies addressing margin, counterparty and basis risk, and must provide prior notice to and obtain approval from the OCC before engaging in foreign exchange risk management. Because foreign exchange derivatives are not eligible reserve assets, their value is excluded from reserve asset value, and the OCC cautioned that a buffer may be needed and that issuers should carefully consider their hedging capabilities before issuing non-dollar coins.
• Insider and affiliate transactions. The proposed rule’s prohibition on “excessive” transactions has been replaced with a prohibition on transactions that, alone or in the aggregate, are “quantitatively detrimental” to the issuer in light of its business model. The OCC stated that an issuer that conducts insider and affiliate transactions consistent with Sections 22(g), 22(h), 23A and 23B of the Federal Reserve Act and Regulations O and W is likely to satisfy this standard, which should be helpful for bank-affiliated issuers already subject to those regimes. There are proposed changes to Regulation O, described in our client memo here.
• Service providers and information technology. Service provider contracts must require measures designed to meet the Act’s requirements as well as part 15. The information technology program must be overseen by a qualified individual rather than an officer with a specified title, and its safeguards and incident notification requirements now extend to “sensitive customer information,” including a customer’s private key.
• Internal controls. The OCC clarified that segregation of duties and dual controls may be elements of an organizational structure that facilitates internal controls. 

In response to comments, the OCC confirmed that a bank-subsidiary PPSI may rely on its parent’s risk management framework to the extent that the framework addresses the Act and part 15 and the PPSI’s management plays a meaningful role, and that SPV issuers may likewise rely on a parent’s framework. The OCC declined to impose real-time monitoring or reporting requirements.

Audits, reports and supervision

Examination, reporting and audit requirements were adopted largely as proposed, with the following changes and clarifications:

• Extended examination cycle. The OCC will continue to conduct full-scope examinations at least every 12 months, but the extended cycle available to small issuers has been shortened to 18 to 24 months (from 18 to 36 months). To qualify, an issuer must have less than $1 billion in outstanding issuance together with any affiliated PPSIs, and the alternative test based on less than $25 billion in monthly trading volume has been removed. The other eligibility conditions are unchanged.
• Weekly and quarterly reporting. The confidential weekly report has been retained, and the OCC declined to adopt real-time reporting. The OCC published Bulletin 2026-52 alongside the final rule that contains revised weekly and quarterly reporting forms and instructions. The weekly form collects daily data, submitted weekly, including the 20 wallet addresses with the largest daily redemptions and all wallet addresses holding more than 2% of an issuer’s outstanding payment stablecoins. It does not ask for the identity of holders. The OCC may publish aggregate statistics in the future. Quarterly reports of financial condition are due within 30 days of quarter-end, must include a CFO declaration and an attestation by directors and senior management, and the OCC intends to publish them, similar to its treatment of Call Reports.
• BSA compliance reporting and certifications. The OCC’s authority to require reports on BSA and sanctions compliance upon request is now limited to federal qualified nonbank issuers. The annual AML and sanctions program certification, due within 180 days of approval and annually thereafter, must initially be provided by the board, but subsequent certifications may be provided by the BSA officer, the board or a board committee.
• Audited financial statements. The requirement for audited annual GAAP financial statements now applies to issuers with more than $50 billion in total consolidated outstanding issuance that are not SEC reporting companies. The OCC clarified that auditors must comply with PCAOB rules, including independence standards.
• Change in control. The application of the OCC’s Change in Bank Control Act regulations to acquisitions of control of PPSIs was adopted as proposed. The OCC noted that most mergers involving PPSIs will involve changes in ownership that trigger these requirements and encouraged issuers to discuss other planned mergers with the OCC.

State qualified payment stablecoin issuers

The GENIUS Act requires a nonbank state issuer that exceeds $10 billion in total consolidated outstanding issuance value to transition to OCC supervision within 360 days of crossing that threshold, unless the state issuer immediately ceases issuance until it drops below that threshold or receives a waiver. The requirements for nonbank state issuers that cross the $10 billion threshold were adopted largely as proposed. The final rule retains the five-day notice requirement, the 270-day capital analysis, the 240-day deadline for waiver requests, the waiver criteria and presumption and an initial OCC examination within six months of transition. The OCC clarified that the threshold is measured on a point-in-time basis and on a total consolidated basis, and that non-consolidated affiliates’ issuance is generally excluded absent evasion. The OCC also added a new path back to state supervision: a transitioned issuer will cease to be supervised by the OCC, and generally will no longer be subject to part 15, upon the OCC’s determination (on request or on its own initiative) that the issuer no longer exceeds $10 billion. 

State qualified issuers below the $10 billion threshold should still pay attention to the OCC’s final rule because each state’s payment stablecoin regulatory framework must be “substantially similar” to the federal regulatory framework. The Treasury Department issued a proposed rule in April 2026 proposing to look to the OCC’s regulations implementing the GENIUS Act for these purposes. On September 30, 2026, Treasury also issued, on behalf of the Stablecoin Certification Review Committee, an interim final rule setting out the forms and procedures for the Committee’s review of state certifications, with comments due November 30, 2026. Because states may adopt certain requirements that exceed the federal floor, state issuers should also track state-level divergence.

OCC authority in unusual and exigent circumstances

The GENIUS Act authorizes the OCC to exercise authority over state nonbank PPSIs in unusual and exigent circumstances. The OCC expanded the factors it will consider in determining whether unusual and exigent circumstances exist to include four factors on which the proposed rule had requested comment: (1) a request from the state issuer or state regulator that the OCC act, (2) significant fluctuations in the secondary market price of the issuer’s coins, (3) whether the issuer has been, or will imminently be, unable to redeem timely and (4) whether the issuer has incurred significant unanticipated losses. These join the original factors: the immediacy of risks to the issuer or the U.S. financial system, the state regulator’s response, risks to holders and any other appropriate factor. The final rule clarifies that the listed restrictions the OCC may impose are not exhaustive. The OCC declined to adopt automatic public disclosure of directives, warning that immediate disclosure could cause or exacerbate a run, and declined to require consultation with the state regulator beyond the Act’s 48-hour notice requirement.

Custody requirements

The custody requirements were adopted largely as proposed. These requirements apply to national banks, FSAs, federal branches and OCC PPSIs when they hold stablecoin reserves, stablecoins used as collateral or the private keys used to issue stablecoins. These custodians must separately record and account for each customer’s covered assets, protect those assets from the claims of their own and any sub-custodian’s creditors and keep possession or control of the assets. They may also hold cash as a deposit liability and use omnibus accounts, provided their recordkeeping is adequate and the use is disclosed in the custody agreement. The final rule also made several clarifications:

• Narrower covered assets. “Covered assets” are limited to assets associated with payment stablecoins that are offered, sold or otherwise made available to persons in the United States, and payment stablecoins used as collateral are covered only where the custodian has actual knowledge of that use. The OCC rejected a constructive knowledge standard as unclear and likely to require burdensome diligence.
• Recordkeeping and custody agreements. A covered custodian must separately record, as well as account for, each customer’s covered assets, and the steps it must take to protect them from creditors’ claims expressly include written custody agreements. The OCC noted that sound practice requires custodians to reconcile distributed ledger data with internal records rather than relying solely on the ledger.
• Sub-custodian omnibus accounts. A new provision confirms that a covered custodian may hold its own assets and its customers’ covered assets at a sub-custodian that commingles them in omnibus accounts for convenience, provided the custodian maintains adequate safeguards and internal controls reasonably designed to ensure that the sub-custodian segregates customer assets from its own.
• Self-custody exclusion. The exclusion for providers of self-custody hardware and software now applies only where the provider neither controls nor holds itself out as controlling the relevant private keys and does not provide or hold itself out as providing custody services.
• Clarification of “private keys used to issue payment stablecoins.” The OCC confirmed that the term, which mirrors the statutory text, refers to the private keys used in the issuance process to create and mint stablecoins and not the private keys associated with end-user wallets. The OCC explained that the latter reading would vastly expand the scope of the GENIUS Act’s custody requirements.

The OCC declined to characterize directed custody of reserve assets as a fiduciary activity per se, confirmed that issuers, not custodians, remain responsible for reserve compliance and concluded that existing reporting (including Call Report Schedule RC-T) is sufficient for now. The OCC also explained that the custody requirements will continue to be informed by the July 2025 joint statement on crypto-asset safekeeping.

Licensing of domestic payment stablecoin issuers

The licensing framework, modeled on the OCC’s national bank chartering process, was adopted with the following changes:

• New review factor. In addition to the four statutory factors, the OCC will consider the applicant’s ability to conduct its proposed activities in a safe and sound manner, “including whether the applicant’s proposed structure adequately addresses run risks and adequately ensures the ability to redeem payment stablecoins.” The OCC grounded this factor in the Act’s safety and soundness standard for denial. This is a departure from the proposed rule, which declined to add factors beyond those in the statute, and it provides a hook through which the OCC may evaluate white-label, SPV and multi-jurisdictional structures. The statutory factors are: whether the applicant has the necessary ability, based on its financial condition and resources, to meet the requirements to issue payment stablecoins; 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; whether the officers, directors and principal shareholders have the necessary competence, experience and integrity to comply with any OCC requirements; and whether the applicant’s redemption policy meets the final rule’s requirements. 
• Conditional approvals. The OCC may approve, conditionally approve or deny an application. Unlike the OCC’s two-phase de novo bank chartering process, an approved or conditionally approved applicant may commence operations as a PPSI immediately, subject to any conditions (although an applicant that is also seeking a de novo national bank charter or federal branch license must still receive final approval to open).
• Public company certification. Applicants must certify whether Section 4(a)(12) of the Act, which imposes additional requirements on public companies not predominantly engaged in financial activities, applies to them. The OCC may condition approval on the applicant obtaining any required finding from the Stablecoin Certification Review Committee before issuing.
• Process refinements. Applications that remain incomplete 60 days after the OCC identifies missing information will be returned without decision, and a material change in circumstances may cause the OCC to treat an application as new. A denial must be accompanied within 30 days by a written explanation of all findings and actionable recommendations, and an applicant may reapply. These filing processes provide specific timeframes for compliance in line with recent OCC guidance that clarifies standards for filing decisions. Appeals may be on the written record, oral or both, and will be considered “anew” (replacing the proposed rule’s “de novo” standard). Principal shareholders that are companies must submit the Corporate Background and Financial Report, in addition to the biographical reports required of individuals.

Timing. The OCC intends to accept applications and associated waiver requests as soon as reasonably possible after the OMB approves the application forms, and will announce by OCC bulletin when it is doing so. The forms have not been officially released but are available on the OMB website as they await approval. Because the Act is not yet effective, the 120-day deemed-approval period will not begin until the later of the Act’s effective date and the date the application is substantially complete. Entities seeking a waiver under the safe harbor should file before January 18, 2027. The OCC declined to require prefiling meetings or publish an application checklist, but applicants may request a prefiling meeting, and the OCC plans to update the Comptroller’s Licensing Manual and to publish licensing decisions and conditional approvals on its website.

Safe harbor for pending applications

The final rule implements the Section 5(f) safe harbor with several clarifications. The OCC may waive the requirements of the Act or part 15 generally, including the Section 3(a) prohibition on issuance by persons other than PPSIs, rather than only the requirements of Section 4. The OCC’s concurrent guidance, however, states that the OCC generally expects to grant waivers from the Act’s licensing requirement to existing U.S. issuers that have submitted a substantially complete application by January 18, 2027, but has not identified generally applicable reasons to waive other requirements or to grant waivers to issuers not already operating in the United States. A waiver of up to 12 months, beginning January 18, 2027, is available to an applicant with a substantially complete application pending on or before that date, if the OCC finds it is in the public interest or justified by extraordinary circumstances. Waiver requests should explain the basis for the request, the requirements to be waived, potential disruptions to existing operations and the applicant’s plan to come into compliance. The OCC stated it does not anticipate that issuers will need the full 12 months and expects that waivers “will be limited to the relief necessary to ensure that it is not impossible or impracticable to comply with the Act.” The OCC may seek public comment on particular requests and may still deny an application notwithstanding a waiver. Foreign payment stablecoin issuers are not eligible.

Prospective issuers that intend to rely on the safe harbor should treat the substantially complete standard as the critical path. Taking into account the OCC’s 30-day completeness review and the 60-day return period for incomplete applications, applicants should aim to file well before January 18, 2027.

Registration of foreign payment stablecoin issuers

The framework for foreign payment stablecoin issuers was adopted largely as proposed, including the 30-day deemed approval of registration applications, the statutory review factors and the conditions of approval. As with domestic applicants, the OCC added a safety and soundness factor addressing run risk and redemption capacity, a certification regarding Section 4(a)(12) and the ability to conditionally approve an application. The most significant change addresses the Act’s requirement that a foreign issuer hold reserves in U.S. financial institutions sufficient to meet the liquidity demands of U.S. customers, absent a Treasury reciprocal arrangement. Reserves will be deemed sufficient only if the issuer:

• Attests that fewer than 50% of its outstanding issuance is held by holders located in the United States and holds reserves at U.S.-organized eligible financial institutions equal to at least 50% of its outstanding issuance;
• Attests that it holds, and does hold, substantially all of its reserves at U.S.-organized eligible financial institutions;
• Ensures on an ongoing basis that its U.S.-held reserves can support timely redemption by U.S. customers under normal and adverse conditions, including through a buffer where necessary; or
• Obtains the OCC’s prior written approval of a detailed proposal for meeting the requirement and complies with it on an ongoing basis.

A foreign issuer may withdraw U.S.-held reserves in excess of the required amount only after due diligence confirms continued compliance. It must report U.S. holdings and reserve composition monthly, notify the OCC of any day on which it falls short and promptly remedy deficiencies, including by depositing additional liquidity in the United States. Absent a reciprocal arrangement, foreign issuers will be subject to the same reporting as domestic issuers, although they may request exemptions. The OCC also emphasized that it does not view itself as possessing “only narrow or otherwise limited supervisory authority” over registered foreign issuers. It noted further that it will conduct full-scope examinations of registered foreign issuers at the same frequency as PPSIs, unless it determines, in its sole discretion, to examine them at a different frequency. The yield prohibition applicable to foreign issuers mirrors the domestic provision. The final rule imposes no direct capital requirement on foreign issuers, but the OCC may impose capital or other PPSI requirements, including conditions on multi-brand issuance, as conditions of registration where not adequately addressed by the home jurisdiction or a reciprocal arrangement. The OCC will publish a list of approved registrants.

Capital and operational backstop requirements

The capital framework retains the proposed rule’s individualized approach, but its components have been substantially reworked.

Capital elements based on GAAP tangible equity. Responding to commenters who objected to importing the bank capital framework, the final rule measures capital as the total of the issuer’s GAAP equity accounts, which includes common stock, retained earnings, certain preferred stock and accumulated other comprehensive income, less deductions for (1) goodwill and other GAAP intangible assets (including certain crypto-assets); (2) deferred tax assets, net of valuation allowances; and (3) operational backstop assets funded by equity (discussed below). The proposed rule did not include any deductions. The OCC explained that a GAAP-based measure is simpler and more transparent for nonbank issuers, that most instruments that qualify as common equity tier 1 or additional tier 1 capital will qualify without reissuance and that intangible assets and deferred tax assets may have little value in a failure. Unlike the bank capital rules, the final rule requires full deduction of deferred tax assets, without the threshold and netting provisions of 12 C.F.R. part 3.

Minimum capital. The proposed rule would have required a floor of $5 million on the minimum capital requirement during the de novo period. The final rule extends the $5 million floor so that it applies on an ongoing basis. 

Calibrating capital requirements. The OCC declined to adopt standardized or variable risk-based capital components or capital buffers, citing the variety of business models and a lack of empirical data. To provide more transparency about its individualized approach, the OCC set out in the preamble the factors it will consider, adapted from OCC Bulletin 2007-21 on national trust bank capital. The OCC noted its experience applying these factors to recent trust bank applications. These factors include the PPSI’s revenue; the level and composition of operational expenses; retained earnings; strategic risk; quality of risk management processes, including the adequacy of internal and external audit, internal controls and the compliance management system; and impact of external factors, including economic conditions, competition, evolving technology, legislative changes and court decisions. 

Operational backstop. The requirement to hold, separately from reserves, highly liquid assets equal to the prior 12 months of total expenses (or reasonable estimates of expenses, for issuers with a shorter operating history) was retained. The OCC rejected the shorter six-month backstop used in some recent charter approvals. Issuers may exclude one-time expenses unrelated to continuing operations with prior OCC approval, must add an acquired issuer’s historical expenses and must reflect the reasonable cost of shared services provided by affiliates, whether or not reimbursed. Eligible backstop assets are unchanged: cash, Federal Reserve Bank balances, fully insured demand deposits and Treasuries with a maturity of 93 days or less. Uninsured deposits and longer-dated Treasuries remain ineligible.

Operational backstop debt. In a significant change from the proposed rule, up to 50% of the backstop may be funded with “operational backstop debt” meeting criteria modeled on tier 2 capital. Among other things, the debt must be paid in, subordinated to holders and general creditors, unsecured, have a minimum five-year maturity and amortize by 20% per year over its final five years, and be callable only after five years with OCC approval. It also may not contain acceleration provisions (other than in insolvency) or credit-sensitive features and may not be funded directly or indirectly by an affiliate. The portion of the backstop not funded by qualifying debt is deducted from capital, so that minimum capital and the backstop are separately capitalized and the same equity cannot be counted twice. The proposed rule had excluded subordinated debt entirely.

Compliance at all times. Issuers must now comply with minimum capital and backstop requirements at all times, rather than at quarter-end, must notify the OCC within 24 hours of any shortfall during a quarter and must publicly report on their quarterly reports whether they complied throughout the quarter. An issuer that remains noncompliant at quarter-end is barred from new issuance beginning the following month, and failure at the end of two consecutive quarters triggers mandatory liquidation and redemption. The OCC may accelerate the issuance restriction if an issuer appears unlikely to regain compliance. A new provision permits an issuer that draws down its backstop to address a temporary disruption or other operational event to continue operating if it submits within seven days a plan to restore the backstop within 90 days that the OCC deems viable.

Uninsured national trust banks. The option for uninsured national trust banks, whether or not they issue payment stablecoins, to follow the part 15 capital and backstop framework in lieu of part 3 was retained. However, an election now requires the OCC’s prior approval, which the OCC will act on within 60 days of a complete request. An uninsured national trust bank also may rescind such an election. The OCC noted that it has issued reservation-of-authority letters to numerous trust banks with stablecoin programs and that those banks could face significant capital charges if unable to elect the new framework. An electing bank must follow all part 15 requirements, including the deductions, which may be more conservative for trust banks that do not issue stablecoins.

Individual additional requirements. The OCC’s authority to impose additional capital or backstop requirements based on facts and circumstances, including where an issuer may be adversely affected by its affiliates, was adopted largely as proposed.

Separate treatment of PPSI capital from parent capital

The amendments to 12 C.F.R. part 3 for insured national banks and FSAs that consolidate a PPSI were adopted largely as proposed, with revisions addressing the PPSI’s undistributed earnings and losses. A parent bank must deconsolidate the PPSI, deduct from common equity tier 1 capital any positive retained earnings originating at the PPSI that have not been paid out as dividends, add back to common equity tier 1 capital its share of any PPSI losses and exclude any remaining investment in or receivable from the PPSI from risk-weighted assets (including operational risk-weighted assets under the advanced approaches), average total consolidated assets and total leverage exposure. The OCC will monitor the loss addback for manipulation. The OCC declined to require source-of-strength or capital maintenance agreements between parent banks and subsidiary PPSIs, stated that the final rule includes no source-of-strength expectation and concluded that interagency asset thresholds and liquidity rules are better addressed on an interagency basis. The OCC is also considering a separate rulemaking on federal branch capital equivalency deposits in 12 C.F.R. part 28 to address concerns that current calculations could disadvantage federal branches offering stablecoin programs.

Fee assessments

The OCC retained its asset-based assessment methodology, rejecting commenters’ proposals for issuance-based, flat-fee or activity-based models, in part because asset-based assessments capture non-reserve balance sheet assets (such as digital assets held to pay network fees). The principal changes are:

• Discount extended to excess reserves. The assessment discount on stablecoin reserve assets is set at a minimum of 35%, which the OCC may increase to as much as 55% through its annual notice of fees. In a change from the proposed rule, the discount now applies to all reserve assets, not just required minimum reserves. The OCC was persuaded that assessing excess reserves at full rates could discourage conservative overcollateralization and concluded that the supervisory process can address attempts to mischaracterize assets as excess reserves. The discount will be calculated using the reserve assets reported on the issuer’s quarterly report.
• Reporting gaps. New provisions permit the OCC to increase a parent bank’s or an issuer’s assessment if its Call Report or quarterly report does not fully reflect the reserve and custodial assets reported on the PPSI’s quarterly reports.
• Foreign issuers. Foreign payment stablecoin issuers have been removed from the asset-based semiannual assessment. For now, they will instead pay cost-based assessments calculated from anticipated supervisory hours and the OCC’s published hourly rate, reflecting uncertainty about the effect of reciprocal arrangements on the OCC’s supervisory role.
• Condition-based surcharges. Surcharges of 1.5x and 2.0x on the semiannual assessment for nonbank federal qualified issuers and transitioned state issuers are now tied to examination findings of less than satisfactory condition and deficient or critically deficient condition, respectively.

The special assessment on entities that derive 50% or more of their income from GENIUS Act custodial activities, consisting of a minimum fee plus a marginal rate on custodial assets above $1 billion, was adopted largely as proposed. The OCC also added a reservation of authority to part 8.

Implementation of GENIUS Act-required procedures

The amendments to 12 C.F.R. part 19 extending the OCC’s rules of practice and procedure to suspension or revocation of registration, cease-and-desist, removal and prohibition and civil money penalty proceedings under Section 6 of the Act, and extending its formal investigation procedures to the GENIUS Act, were adopted as proposed. The OCC received no comments on these amendments. Revocation of a PPSI’s approval for failure to file the required AML and sanctions certification, and rescission of a foreign issuer’s registration (in consultation with Treasury), will likewise follow part 19 hearing procedures, subject to expedited action where necessary to protect the public interest.

What the final rule does not cover

The OCC characterizes the final rule as addressing all of its GENIUS Act rulemaking obligations other than with respect to BSA/AML and sanctions compliance. A number of other important implementation steps remain outstanding:

• BSA/AML and sanctions. FinCEN and OFAC jointly proposed AML and sanctions compliance program requirements for PPSIs in April 2026. The OCC proposed its own BSA/AML and sanctions compliance rules for PPSIs in June 2026, and a separate customer identification program proposal was also published by FinCEN in June 2026. Neither has been finalized.
• Other federal payment stablecoin regulators. The FDIC, the Federal Reserve and the NCUA have not yet finalized their implementing rules. The FDIC’s proposal differs from the final rule in certain respects, including its default requirement of segregated reserve pools for multi-brand issuers, and also addresses deposit insurance treatment of reserve deposits. The Federal Reserve’s proposal followed the OCC’s proposed rule and would also adopt a rebuttable yield presumption but departs from it on capital and reserve diversification, remains open for comment through November 30, 2026. Whether those agencies follow the OCC in abandoning the yield presumption will be important to the competitive landscape among bank-affiliated, nonbank and state issuers.
• Treasury. Treasury has proposed regulations on payment stablecoin issuance, offers and sales, which take the position that PPSIs are also digital asset service providers under the Act (see our client update on the proposal here). Treasury is also responsible for comparability determinations and reciprocal arrangements for foreign regimes, which are prerequisites for foreign issuer registration, and for the principles for determining whether state regimes are substantially similar to the federal framework. 
• Stablecoin Certification Review Committee. Public companies not predominantly engaged in financial activities that are subject to the new Section 4(a)(12) certification will need to satisfy the requirements administered by the Stablecoin Certification Review Committee, and the OCC may condition approvals accordingly.
• Further OCC action. The OCC has indicated that it will finalize the weekly and quarterly reporting forms, update the Comptroller’s Licensing Manual and issue guidance and interpretations as the market develops. It has also flagged potential future rulemakings on collateral trustee arrangements, the yield prohibition, federal branch capital equivalency deposits (12 C.F.R. part 28) and conforming changes to other OCC regulations.
• Interagency capital and liquidity treatment. Commenters’ requests to revise the interagency capital and liquidity rules (including the liquidity coverage ratio and net stable funding ratio) to address payment stablecoins and reserve assets at the parent level were treated as beyond the scope of the rulemaking.
• Legislation. The OCC stated that it will revise the final rule as appropriate in response to any enacted legislation affecting its implementation of the Act, including legislation relating to the yield prohibition.

Visit our Crypto Regulation Hub for additional resources on the regulation of digital assets, including our earlier coverage of the GENIUS Act and its implementation.