Written by: KarenZ, Foresight News
On October 21, 2026, the U.S. Office of the Comptroller of the Currency (OCC) published the final rule implementing the GENIUS Act, specifying that the final rule will take effect on January 18, 2027. For companies hoping to issue stablecoins in the United States, licensing, reserve, redemption, and capital requirements are beginning to enter an implementation phase with clear deadlines.
The final version presents an arrangement that is loose in some respects and tight in others: reserve allocation gains more flexibility, the capital floor continues to apply, the automatic extension for large redemptions is eliminated, and the presumption of violation for certain third-party yield arrangements is also removed. How these adjustments will affect competition between bank-affiliated issuers and crypto-native companies, as well as the respective compliance paths of USDC, Open USD, and USDT, are questions more worth tracking after the rules take effect.
U.S. Treasury Secretary Scott Bessent said of this that, just as the National Currency Act promoted in 1863 established a national framework for banks to issue currency, the GENIUS Act establishes a federal regulatory framework for payment stablecoins in the digital age.
From legislation to implementation, what detailed rules has the OCC filled in?
First, to clarify one point: the implementation of the GENIUS Act was not achieved overnight. It is the Guiding and Establishing National Innovation for U.S. Stablecoins Act passed by the U.S. Congress in 2025 and signed by the President on July 18 of the same year. What the OCC published this time are the implementing rules authorized by the Act for it to formulate, applicable to issuers within the scope of its regulatory authority and certain related custody activities. Supporting requirements related to the Bank Secrecy Act, anti-money laundering, and sanctions will be formulated separately by the OCC in coordination with the Treasury Department.
The OCC stated that this rulemaking received hundreds of comments from crypto companies, community banks, industry organizations, academia, and other parties.
For the industry, the most important change is that regulation is moving further from a legal framework and principled requirements toward specific application, reporting, and supervision processes.
Who can issue stablecoins is beginning to have clearer entry thresholds
One of the core systems of the GENIUS Act is the establishment of a regime for permitted payment stablecoin issuers. From the effective date, issuing payment stablecoins in the United States must in principle be done by a permitted payment stablecoin issuer.
Entities supervised by the OCC include national banks and related subsidiaries, federally qualified payment stablecoin issuers, certain state-qualified issuers, and foreign issuers that meet applicable conditions. Other issuers may be overseen by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), or state regulators, depending on the nature of the institution and statutory supervisory authority.
The key issue at hand is the application transition. As of October 22, the OCC has not yet opened applications and is still awaiting approval from the U.S. Office of Management and Budget (OMB) for the information collection in the application form. According to OCC guidance, issuers that meet the conditions and have a substantially complete application pending on or before January 18, 2027 may apply to the OCC for an exemption of up to 12 months. Exemptions do not take effect automatically; the OCC will review them case by case. Currently, regulators expect to consider exemptions from prior approval requirements mainly for issuers whose applications are still under review, in order to reduce business disruption caused by applications not yet approved after the new rules take effect.
Reserves, redemption, and reporting: turning the "1 dollar promise" into a superviseable system
The GENIUS Act requires payment stablecoin issuers to maintain identifiable reserve assets of at least 1:1 and limits the scope of eligible reserves, including cash, qualifying deposits, short-term U.S. Treasury securities, and other assets permitted by the Act. Payment stablecoins are also not equivalent to bank deposits, and holders cannot assume that merely holding stablecoins means they enjoy federal deposit insurance.
The OCC final rule further clarifies the operational requirements for timely redemption and sets the usual redemption time limit at no more than two business days. The specific starting time, necessary customer verification conditions, and when redemption is deemed completed should be based on the relevant provisions of the final rule and the redemption policies publicly disclosed by issuers.
The reporting system has also been further refined. The OCC also plans to require relevant issuers to submit weekly stablecoin activity and reserve reports, as well as quarterly financial condition and revenue reports. The revised forms are still open for comment and awaiting OMB approval; if approved, the relevant reporting requirements are planned to take effect from the weekly report date of January 25, 2027 and the quarterly report date of March 31, respectively.
What are the key changes in the OCC final rule?
Here, the comparison is between the OCC draft and the final version. The relevant adjustments mainly include the following four items:
First, retain the issuer yield prohibition and remove the "rebuttable presumption" for certain third-party arrangements.
The GENIUS Act provides that permitted payment stablecoin issuers and foreign payment stablecoin issuers meeting relevant statutory conditions may not pay any form of interest or yield to holders solely because the holders hold, use, or retain payment stablecoins, including cash, tokens, or other consideration. The OCC final rule retains this prohibition and does not loosen the ban on issuers directly paying interest to coin holders for the above reasons.
The draft had established a "rebuttable presumption" for affiliated parties and third-party yield arrangements meeting specific conditions: first presuming the prohibition was triggered, then allowing issuers to submit materials to rebut it. The final version deletes this mechanism and instead has the OCC examine specific arrangements during application review and ongoing supervision and take action against transactions that violate or evade the prohibition.
Changing the paying entity does not automatically avoid the prohibition. The OCC clearly states that if an agent acts on behalf of an issuer and pays interest or yield solely because holders hold, use, or retain stablecoins, it still falls within the prohibited scope. Other third-party reward arrangements must be judged based on the actual payment relationship and the reason for payment.
Second, reserve arrangements are more flexible.
The OCC draft had proposed two alternatives. Option A was based on principle-based requirements, requiring issuers to diversify reserves and manage concentration risk, while providing a voluntary quantitative "safe harbor": meeting all safe harbor conditions would be deemed compliance with that requirement; issuers not choosing the safe harbor would still have to meet the principle-based requirements. Option B directly made those quantitative indicators in the Option A safe harbor mandatory requirements. The quantitative parameters involved in both options included at least 10% designated immediately available funds, at least 30% five-business-day liquidity, and a weighted average maturity of the reserve portfolio of no more than 20 days, among others.
The final version combines the two: it retains the principle-based requirements of Option A while incorporating adjusted mandatory indicators, setting the minimum proportion of designated immediately available funds at 5%, deleting the 30% five-day liquidity and 20-day weighted average maturity indicators, and adding stress testing and requiring additional reserve buffers when necessary. Therefore, issuers have gained more allocation space, but meeting numerical floors such as 5% does not mean they have fulfilled all reserve management obligations.
Third, the $5 million minimum capital requirement extends to the going-concern stage.
The OCC final rule retains the $5 million minimum capital floor and extends it from the initial stage of newly approved issuers to the going-concern stage. The capital requirement for newly established issuers is the higher of the amount specified in their licensing conditions and $5 million; after entering the going-concern stage, issuers must still maintain capital appropriate to their business scale and risks, and not less than $5 million.
It should be noted that this money is not reserve assets used to support stablecoin redemption. The OCC also requires relevant issuers to separately prepare operating backup assets equivalent to 12 months of total operating expenses to address business interruptions and other situations. The three requirements each have different purposes and cannot substitute for one another.
Fourth, large redemptions cannot be automatically extended.
The draft originally proposed automatically extending the period to seven calendar days when redemptions surge. The final version cancels this mechanism: if a single brand of stablecoin receives redemption requests exceeding 10% of its outstanding issuance value within a 24-hour period, the issuer must notify the OCC within 24 hours; if an extension of the redemption period is needed, a separate application must be made, and the OCC will decide whether to approve it.
These adjustments leave more room for reserve allocation and also impose clearer requirements on issuers' going-concern and redemption capabilities: they must maintain necessary capital and operating backup assets, and also make liquidity arrangements and redemption contingency plans in advance to cope with concentrated redemption demands in a short period.
What shortcomings do banks and crypto-native companies each need to address?
Judging from the above operating requirements, banks' existing compliance, custody, and corporate customer systems can serve as a foundation for participating in the stablecoin business. But after obtaining issuance qualification, they still need to address payment products, channel access, and actual usage demand.
Crypto-native companies, on the other hand, need to connect on-chain technology and distribution capabilities with continuous redemption, capital management, and regulatory reporting. Some mature issuers already have corresponding systems, and the extent of adjustment needs to be judged case by case. For smaller companies, capital, systems, and reporting requirements may create more obvious fixed-cost pressure; whether this will increase market concentration still depends on actual entry and exit conditions.
Competition over third-party rewards is particularly sensitive. The American Bankers Association (ABA) worries that stablecoin issuers may indirectly provide holders with interest-like yields through affiliates, trading platforms, or other distribution partners, attracting customers to convert bank deposits into stablecoins and weakening banks' source of funds for local lending. Rob Nichols, the association's president and CEO, criticized that the OCC's deletion of the originally proposed measures targeting certain third-party yield arrangements would allow crypto platforms to continue existing reward models. He believes that regulators should guard against deposit outflow risks in advance and should not wait for economic harm to appear before taking action.
However, the White House Council of Economic Advisers (CEA) pointed out in its April 2026 report "The Impact of a Stablecoin Yield Ban on Bank Lending" that the expansion of stablecoins does not necessarily lead to an equal reduction in bank deposits. For example, when a customer transfers funds out of Bank A to purchase stablecoins, the issuer then uses that money to buy Treasury bonds from a dealer; if the dealer deposits the proceeds from selling the bonds into Bank B, the funds simply move between banks. Therefore, to assess the impact of stablecoins on banks, it is necessary to further observe fund flows, the nature of deposits, and the financing pressures borne by different banks.
How do USDC, USDT, and Open USD each connect with the new rules?
The capability differences between banks and crypto-native companies, when applied to specific products, come down to how to obtain issuance qualifications, manage reserves, and arrange channel partnerships and rewards. USDC, Open USD, and USDT all need to face these requirements, but based on existing disclosures, the aspects worth watching differ for each.
The USDC reserves disclosed by Circle include bank deposits, short-term Treasury bonds, and overnight Treasury reverse repos, and there are already regular disclosures and monthly third-party attestations. These arrangements provide a business foundation for adapting to the new framework; next, it remains to be seen how the actual issuing entity will connect with the relevant operational requirements.
It is worth noting that in February 2026, Circle received OCC approval to establish a national trust bank, which will provide federally regulated custody services for USDC. However, USDC issuance and trust bank custody are different businesses; one cannot conclude solely on the basis of this bank charter that USDC has obtained an issuance license under the GENIUS framework.
For USDT, one important issue is how to connect with U.S. market access. If entering the U.S. market through the path of a foreign issuer, it would need to satisfy the Treasury Department's comparability determination of its regulatory regime, OCC registration, and conditions such as redemption liquidity for U.S. customers. To evaluate whether this path can work, it is necessary to observe the specific determination and registration progress.
At the same time, Tether has already made a product-level distinction. Its USAT, aimed at the U.S. market, is issued by Anchorage Digital Bank and designed according to the GENIUS framework; USDT, meanwhile, continues to target the global market. To analyze Tether's U.S. layout, it is necessary to separately examine the issuance and access arrangements for USAT and USDT; USAT's bank issuance model does not automatically grant USDT the same qualification.
Open USD (OUSD) provides a concrete case for observing the rewards model. The author previously stated in the article "Open USD Just Formed Its Group, and Circle's Stock Fell First" that Open USD operator Open Standard plans to distribute all returns generated by reserve assets to partners that adopt and distribute Open USD (deducting only a small management fee to cover operating costs). Open Standard is an independent company, while the actual issuer of OUSD is Bridge Building Inc.
This makes the third-party revenue controversy discussed above more concrete: why partners receive rewards, what services they actually provide, and whether payments are made on behalf of the issuer will all affect the judgment. After the OCC removed the "rebuttable presumption," OUSD's reward arrangements still need to be assessed based on the actual contracts and payment relationships.
