OCC Finalizes GENIUS Act Stablecoin Rules, Delays Decision on Exchange Rewards
OCC becomes first regulator to finish stablecoin rules
The Office of the Comptroller of the Currency (OCC) finalized its rules for implementing the GENIUS Act on Wednesday, making it the first federal regulator to complete the stablecoin framework Congress passed in July 2025. The rule takes effect January 18, 2027.
Stablecoins are crypto tokens designed to hold a steady value, usually pegged to the US dollar. They are the main trading pair for bitcoin on most exchanges.
The rules set federal standards for payment stablecoin issuers, covering reserve backing, redemptions, capital, custody, audits and risk management. They also create a licensing and supervisory regime for national banks, their subsidiaries, nonbank companies and foreign issuers under OCC jurisdiction.
What the OCC says about the new framework
Comptroller Jonathan Gould said in a statement that the agency is providing "a clear, practical framework for payment stablecoin innovation, with strong standards for reserve backing, redemption, and risk management." He described the rule as advancing "President Trump and Secretary Bessent's vision for American leadership in digital assets."
The GENIUS Act was the first federal law to govern stablecoins. It required one-to-one reserve backing and annual audits, and it directed bank regulators to write the implementing rules. The Federal Reserve and the FDIC have issued proposals, and the Treasury is drafting its own.
Key points
- Final rule effective January 18, 2027.
- Issuers may now hold longer-dated Treasuries after a proposed 20-day weighted-average maturity limit was dropped.
- Surplus reserves can be withdrawn at any time instead of once a month, as long as outstanding stablecoins stay backed one-to-one.
- Issuers must tell the OCC within 24 hours if redemption requests top 10% of a stablecoin's outstanding value in one day.
- The agency has not said when it will start accepting issuer applications.
Rewards question left to case-by-case review
The biggest change from an earlier February proposal is what the OCC removed. The GENIUS Act bans issuers from paying interest or yield to stablecoin holders, but it does not address exchanges and other third parties that offer rewards on stablecoin balances. Banking groups have called this the "stablecoin loophole" and lobbied for months to close it, arguing that yield on tokens could pull deposits out of banks and weaken lending.
The proposed rule would have treated certain arrangements between issuers and third parties as presumed violations of the ban. The final rule drops that presumption in favor of case-by-case review.
According to Crypto in America, an OCC official told reporters, "We will just let the market develop and address it as it comes," and declined to say whether existing exchange rewards programs comply with the rule. The official noted the agency has authority to pursue clear evasions of the ban.
The decision is a setback for banks, which had turned to the OCC after the Clarity Act, a broader crypto market structure bill, failed a Senate procedural vote in September. Stablecoin yield was one of the central sticking points in those negotiations.
Reserve and redemption rules get more flexibility
The final rule eases several proposed limits on reserve management. It removes the 20-day weighted-average maturity limit on reserve assets, letting issuers hold longer-dated Treasuries. Issuers can withdraw surplus reserves at any time rather than once a month, provided outstanding stablecoins remain backed one-to-one.
On redemptions, the OCC removed a provision that would have extended deadlines during a surge in withdrawal requests. Instead, issuers must notify the OCC within 24 hours if redemption requests exceed 10% of a stablecoin's outstanding value in a single day, according to Crypto in America.
What is confirmed
The OCC finalized its GENIUS Act implementing rules and published a statement from Comptroller Jonathan Gould. The rule takes effect January 18, 2027. The final rule drops the presumption against certain issuer and third-party reward arrangements, scraps the 20-day maturity limit, allows anytime withdrawal of surplus reserves, and sets a 24-hour notification requirement for large redemption surges.
What is still unclear
The OCC has not announced when it will accept applications from prospective issuers. It also declined to say whether existing exchange rewards programs comply with the rule. Anti-money laundering and sanctions rules will come in a separate rulemaking with the Treasury, but no timeline was given.
Why this matters
The GENIUS Act was the first federal statute to govern stablecoins, and the OCC is now the first regulator to finish its implementing rules. The treatment of third-party rewards remains open, leaving banks and exchanges without a final answer on whether yield-bearing stablecoin products are allowed. The rule also gives issuers more room in how they manage reserves.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
Related Posts
Nasdaq Invests $100M in Kraken Parent Payward at $21 Billion Valuation
Strategy Completes $139 Million Share Repurchase, Maintains Bitcoin Holdings
BlackRock sees stronger case for bitcoin as ETF trading hits record week
