Payment stablecoin issuers supervised by the OCC face final reserve, redemption and approval requirements. Existing issuers may seek temporary waivers; the regulator will announce when applications open.
The Office of the Comptroller of the Currency (OCC) announced its final GENIUS Act rules on October 21, setting requirements for payment stablecoin reserves, redemption, risk management and issuer approvals. The obligations for issuers under OCC supervision take effect on January 18, 2027. The agency will separately announce when it begins accepting approval and waiver applications.
The GENIUS Act became law on July 18, 2025, and the OCC announced its proposal on February 25, 2026. The regulator considered 328 comment submissions in preparing the final rule. The OCC’s jurisdiction includes federal payment stablecoin issuers, certain state and foreign issuers, and specified custody activities. Anti-money-laundering and sanctions requirements are being addressed in a separate rulemaking with the Treasury Department.
In its official October 21 post, the OCC shared Comptroller Jonathan Gould’s comments on reserves, redemption and risk management alongside the final-rule announcement.
OCC post announcing the final stablecoin rules
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“strong standards for reserve backing, redemption, and risk management.”
Comptroller Jonathan Gould, from the OCC announcement
Other agencies are developing separate rules under the GENIUS Act. The Federal Reserve issued reserve and approval proposals for institutions it supervises on September 24. Blockchain Association submitted comments on October 19 on the Treasury Department’s August 18 issuance, offer and sale proposal, asking that software providers without custody of customer assets be excluded.
Reserves must cover token liabilities at all times
Section 15.11 of the final rule requires reserve value never to fall below the par value of outstanding payment stablecoins. Issuers must segregate reserves from their other assets and be able to convert the reserves to cash in both normal and stressed market conditions. An issuer may need to hold additional reserves to preserve full backing when asset values change or liquidation incurs costs.
Eligible assets include US currency, Federal Reserve account balances, demand deposits at insured depository institutions and US Treasury securities with no more than 93 days remaining to maturity. Qualifying overnight repo transactions and government money market funds investing solely in permitted assets are also allowed. Issuers may use tokenized reserve assets only if the underlying assets are eligible and the relevant legal conditions are met.
At least 5% of reserves must be held in demand accounts or Federal Reserve balances. Exposure to a single counterparty generally cannot exceed 40%, with exceptions for US government entities, qualifying custody arrangements and certain centrally cleared repo transactions. Issuers must publicly disclose reserve amounts, composition, average tenor and custody locations each month. A registered public accounting firm must examine the monthly reserve information, and the issuer must publish the examination report. The CEO and CFO must certify the reserve information’s accuracy to the OCC each month.
If reserve value falls below liabilities, the issuer must notify the OCC and immediately stop issuing new tokens, subject to limited exceptions. If the shortfall persists for 15 consecutive business days and the OCC does not allow more time, the issuer must begin liquidating reserves and repaying holders. The issuer cannot charge fees for redemptions during liquidation.
Two business days, subject to customer checks
A holder redeems a token by returning it to the issuer in exchange for money at face value. The issuer must have received the request, completed reasonable customer onboarding checks and met the other legal conditions for redemption. The general deadline is two business days after the requested redemption date. The issuer completes redemption by finishing processing and initiating the money transfer, or by crediting the holder’s account with the issuer if the holder requests it. A transfer to another bank may take longer to reach the recipient’s account.
If redemption requests exceed 10% of a brand’s outstanding tokens over 24 hours, the issuer must notify the OCC within 24 hours and may request more time. The OCC decides whether to extend the deadline. Issuers must publish clear fees and redemption policies and give at least seven calendar days’ notice of fee changes. Holders who satisfy the required checks may request redemption of at least one token.
Section 15.10 prohibits an issuer from paying interest or yield solely for holding, using or retaining a payment stablecoin. Payments in cash, tokens or other consideration are covered. Issuers also cannot market tokens as US-issued or US-guaranteed money, or claim FDIC deposit insurance for token balances.
Applications await OMB approval
According to the OCC’s approval and waiver guidance, the OCC needs approval from the Office of Management and Budget (OMB) before collecting information through the application form. The OCC has not announced when applications will open. Applicants will need a business plan, management information, reserve and redemption arrangements, capital and liquidity plans, risk controls, service-provider details and a compliance program. A substantially complete application must provide enough information for an OCC decision; submitting a form alone is insufficient.
Existing issuers with substantially complete applications pending on January 18, 2027 may request a written waiver. The OCC generally expects to let existing US issuers operate temporarily while their applications are pending, unless overriding reasons justify refusing a waiver. The maximum duration is 12 months from January 18, 2027, and the agency will grant only as much time as needed. The OCC expects new entrants to obtain approval before starting operations.
| Stage | Date or period | Condition |
|---|---|---|
| Rule takes effect | January 18, 2027 | Requirements within OCC jurisdiction |
| Temporary waiver | Up to 12 months from January 18 | Written request and OCC decision |
| Approval decision | Up to 120 days after a substantially complete application | OCC confirmation that the application contains enough information for a decision |
| First proposed report dates | Weekly: January 25; quarterly: March 31, 2027 | OMB approval of reporting forms |
The OCC will tell applicants within 30 days whether it has enough information to make a decision. If it requests additional documents, the agency has another 30 days to assess them after receipt. An application still lacking the required information 60 days after the initial deficiency notice may be returned. Once an application is substantially complete, it is deemed approved unless the OCC denies it within 120 days. The agency may ultimately deny an issuer’s application even after granting a temporary waiver.
Gould discusses preparations for the rules in the GENIUS Act chapter beginning at 07:18 in the OCC’s August 19, 2026 discussion. In the agency’s written excerpts published that day, Gould describes how the OCC supervised reserves backing bank-issued money in the 1860s. He presents payment stablecoin reserve supervision as a continuation of the agency’s historical role.
Reporting forms remain open to comment
The OCC updated the weekly and quarterly forms it proposed in June through a separate reporting notice. Comments will be accepted for 30 days after Federal Register publication. Subject to OMB approval, the first weekly report date will be January 25, 2027 and the first quarterly report date March 31, 2027. The reports will show data as of January 25 and March 31; filing deadlines have not yet been announced.
Custodians must keep separate records of customer assets, apply custody controls and segregate the assets from claims by their own creditors. Providers of self-custody software or hardware are excluded if they do not control private keys or hold themselves out as custodians.
Limits of a waiver: Temporary relief from prior approval does not automatically remove an existing issuer’s other GENIUS Act obligations. The OCC says it sees no general compelling case for waiving other provisions or the prior-approval requirement for new entrants. Bank subsidiaries may seek a waiver; insured depository institutions cannot receive one themselves.
