Implementing GENIUS: OCC Proposes Rules for Payment Stablecoin Issuers Authored by Corey F. Rose, Brenden P. Carroll, Neel Maitra, Megha Kalbag, Devon M. Roberson, Austin G. McComb, Jessa Goldman
March 2026
Implementing GENIUS: OCC Proposes Rules for Payment Stablecoin Issuers
March 2026 / Authored by Corey F. Rose, Brenden P. Carroll, Neel Maitra, Megha Kalbag, Devon M. Roberson, Austin G. McComb, Jessa Goldman
Key Takeaways
The OCC recently proposed its much-anticipated rules that would implement the GENIUS Act and establish a comprehensive federal licensing and prudential regulatory framework for payment stablecoin issuers subject to OCC jurisdiction. The Proposed Rules propose standards and requirements for payment stablecoin issuers relating to, among other areas, permitted activities, reserve asset composition, redemption timing, risk management (including private key management), custody, capital levels and periodic reporting. The OCC stated that they would address anti-money laundering and sanctions requirements in a separate rulemaking in coordination with the Treasury Department. The Proposed Rules also meaningfully extend a heavily-debated provision within the GENIUS Act that prohibits the direct payment of interest or yield by a payment stablecoin issuer to stablecoin holders. Importantly, the Proposed Rules would include an anti- circumvention provision that creates a rebuttable presumption intended to prohibit certain indirect payments by affiliates and “related third parties” of payment stablecoin issuers, including white-label partners. The OCC has asked over 200 specific questions in the Proposing Release, including in areas that are likely to have significant competitive, product design and operational implications. With the payment stablecoin market rapidly expanding in recent years and expectations of continued growth, we expect significant engagement with the OCC on the Proposed Rules prior to the comment deadline of May 1, 2026, from market participants, including stablecoin issuers, digital asset exchanges, banking organizations, and asset managers.
Executive Summary
On February 25, 2026, the Office of the Comptroller of the Currency (the “OCC”) published a Notice of Proposed Rulemaking (the “Proposed Rules”) 1 to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act” or “Act”), 2 which was enacted on July 18, 2025. The GENIUS Act establishes a comprehensive regulatory framework for “payment 1 OCC, Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency , Notice of Proposed Rulemaking, 91 Fed. Reg. 10202 (Mar. 2, 2026) (the “Proposing Release”). At times, this Dechert OnPoint tracks the Proposing Release without the use of quotation marks. 2 GENIUS Act, Pub. L. No. 119-27, 139 Stat. 419 (2025). For more information on the GENIUS Act, please refer to The GENIUS Act for Asset Managers: What to Know, Dechert OnPoint (Aug. 2025).
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stablecoins,” a type of stablecoin to be used as a means of payment or settlement rather than investment. Payment stablecoin issuers will generally be limited to: (i) certain U.S. qualified persons subject to federal or, for certain issuers, state supervision; or (ii) certain foreign qualified persons registered with the OCC and subject to a comparable regulatory and supervisory regime (as determined by the Treasury Secretary). The GENIUS Act will take effect on the earlier of: (i) January 18, 2027; or (ii) 120 days following the issuance of final regulations implementing the Act. The Proposed Rules would establish a comprehensive federal licensing and prudential regulatory framework for Stablecoin Issuers (defined below) subject to OCC jurisdiction as well as a registration regime for foreign payment stablecoin issuers. The Proposed Rules address standards and requirements for payment stablecoin issuers relating to, among other areas, permitted activities, reserve asset composition, redemption timing, risk management (including private key management), custody, capital levels, and periodic reporting. For example, the Proposed Rules would establish stringent reserve asset composition and diversification requirements that would take the form of either a principles-based framework with an optional safe harbor or a mandatory quantitative framework. These requirements could limit the amount of reserve assets invested in a single U.S. government money market fund. The OCC is also seeking to extend the GENIUS Act’s prohibition on the direct payment of interest or yield by a payment stablecoin issuer to the “holders” of its payment stablecoins. The Proposed Rules would extend this prohibition to certain indirect payments by affiliates and “related third parties” of payment stablecoin issuers, including white-label partners. The GENIUS Act was silent on indirect payments and certain platforms and intermediaries currently pay “rewards” to consumers that hold payment stablecoins. As Congress considers comprehensive market structure legislation, payment of interest or yield on a payment stablecoin remains an active and contentious issue, with some market participants expressing concerns that paying yield on payment stablecoins could impact bank deposits and potentially reduce bank lending. 3 The OCC has asked over 200 specific questions in the Proposing Release, including in areas that are likely to have significant competitive, product design and operational implications. The deadline for comments is May 1, 2026.
Scope and Licensing
The Proposed Rules would apply to three main categories of “permitted payment stablecoin issuers” under the GENIUS Act:
subsidiaries of insured national banks 4 or federal savings associations,
3 The Stablecoin Yield Debate, Congressional Research Service (March 6, 2026). 4 The OCC recently issued a final rule amending its national bank chartering regulation to clarify that national trust banks (which generally do not accept deposits or carry FDIC insurance) may engage in non-fiduciary activities in addition to fiduciary activities. See OCC, National Bank Chartering , Final Rule, 91 Fed. Reg. 9977 (Mar. 2, 2026). The OCC has also recently conditionally approved several applications from firms seeking national trust bank charters to act as custodians for digital assets, which some claimed was beyond the permitted scope of OCC authority and national trust bank powers. This final rule seeks to provide clarity for entities that may wish to obtain national trust bank charters to engage in stablecoin-related activities contemplated by the GENIUS Act.
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nonbank entities that are not regulated by a state, uninsured national banks, and federal branches or subsidiaries thereof, and nonbank entity state issuers with issuance value of more than $10 billion that are transitioning to OCC oversight (collectively, “Stablecoin Issuers”). 5 The Proposed Rules also provide procedures for a foreign stablecoin issuer to register with the OCC, consistent with the GENIUS Act requirements, and would subject foreign stablecoin issuers to ongoing reporting, supervision and examination requirements. However, a foreign stablecoin issuer would not be able to register with the OCC until the Treasury Secretary makes a comparability determination for its home jurisdiction. The Proposed Rules would require Stablecoin Issuers, other than nonbank entity state issuers transitioning to OCC oversight, 6 to file an application and obtain OCC prior approval before issuing payment stablecoins. Substantially complete applications 7 may only be denied by the OCC if the applicant’s activities are deemed to be unsafe or unsound. 8
Permitted Stablecoin Issuer Activities
The Proposed Rules would apply to activities related to payment stablecoins, such as issuance, redemption, managing reserves, and custodial services. The Proposed Rules would create a framework of permitted and prohibited activities that largely mirrors the GENIUS Act in structure. However, the most notable extension beyond the statute is with respect to the prohibition on interest or yield paid to payment stablecoin holders.
Permissible Activities
Consistent with the GENIUS Act, Stablecoin Issuers would be permitted to engage in the following activities:
issuing payment stablecoins,
redeeming payment stablecoins,
managing reserves,
5 The Proposed Rules would not apply to permitted payment stablecoin issuers whose ‘‘primary Federal payment stablecoin regulator’’ (as defined in the GENIUS Act) is another agency, for example, subsidiaries of state member banks overseen by the Federal Reserve or subsidiaries of state non-member banks overseen by the Federal Deposit Insurance Corporation. 6 Nonbank entity state issuers transitioning to the OCC’s regulatory framework would be required to transition no later than 360 days after reaching the $10 billion threshold. 7 The OCC must determine substantial completeness within thirty (30) days. 8 The factors that the OCC would consider when evaluating whether an applicant’s activities meet the safety and soundness standard include: (i) the ability of the Stablecoin Issuer to meet the requirements of the Proposed Rules; (ii) whether any officer or director has been convicted of a financial crime felony offense; and (iii) the competence, experience and integrity of the officers, directors, and principal shareholders of the Stablecoin Issuer including their past compliance with laws and their ability to comply with any commitments or conditions imposed by the OCC.
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providing custodial or safekeeping services for payment stablecoins, reserves, or private keys of payment stablecoins, and
any activity that directly supports any of the foregoing activities.
In the Proposing Release, the OCC gives an example of the type of activity covered by the catch-all provision: a Stablecoin Issuer holding non-payment stablecoin crypto-assets as principal necessary for testing a distributed ledger, whether internally developed or acquired from a third- party. The OCC notes that such proprietary holdings by a Stablecoin Issuer directly support both issuance and redemption of payment stablecoins and is therefore permissible under the catch-all provision. The OCC encourages Stablecoin Issuers to ask the OCC directly if they are unclear as to whether an activity is permissible. Drawing on other statutory provisions, the Proposed Rules would also add the following to the list of permissible activities:
assessing fees associated with purchase or redemption of payment stablecoins,
acting as principal or agent with respect to any payment stablecoin, and
paying fees to facilitate customer transactions ( e.g., network or “gas” fees).
The OCC in the Proposing Release notes that Stablecoin Issuers may also engage in other activities that are independently authorized by other federal or state law ( e.g. , an uninsured national bank may engage in fiduciary, trust, and other related activities consistent with applicable law). 9
Prohibition on Payment of Interest or Yield
The Proposed Rules would meaningfully extend the prohibition on the payment of interest or yield on a payment stablecoin beyond the relevant provision in the GENIUS Act. Statutorily, the prohibition covers any payment of interest or yield (whether in cash, tokens, or other consideration) by a Stablecoin Issuer directly to a payment stablecoin “holder” solely in connection with the holding, use, or retention of such payment stablecoin. The Proposed Rules would go further to create a rebuttable presumption that deems a Stablecoin Issuer to be paying interest or yield to a payment stablecoin holder when: a Stablecoin Issuer has a contract, agreement, or arrangement with an affiliate or “related third-party” 10 to pay interest or yield to the affiliate or related third-party; and
the affiliate or related third-party (or affiliate of such related third-party) has a contract, agreement, or arrangement to pay interest or yield (whether in cash, tokens, or other
9 See, e.g. , OCC, Bulletin 2026-4, 91 FR 9977 (Feb. 27, 2026). 10
A “related third-party” would include any person paying interest or yield to payment stablecoin holders as a service ( i.e. , on behalf of the Stablecoin Issuer) and any person that the Stablecoin Issuer issues payment stablecoins on behalf or under the branding of ( i.e. , persons that have entered a white-label relationship with the Stablecoin Issuer). For the rest of this sub-section, affiliates and related third-parties may be simply referred to as “third-parties.”
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consideration) to a holder of a payment stablecoin issued by the Stablecoin Issuer solely in connection with the holding, use, or retention of such payment stablecoin. In a “white-label” arrangement where a Stablecoin Issuer issues payment stablecoins on behalf or under the branding of a third-party, the Proposed Rules provide that the rebuttable presumption would be triggered only to the extent the payment stablecoin holder holds the third-party’s white- labeled payment stablecoin (as opposed to other payment stablecoins issued by the Stablecoin Issuer). The OCC’s rationale for this rebuttable presumption is that, under these circumstances, the close nexus between a Stablecoin Issuer’s payments and payments to the payment stablecoin holder as well as the close contractual or control relationship between the Stablecoin Issuer and the other party would make it “highly likely” that the Stablecoin Issuer’s payments of interest or yield would be made to the holder through an intermediary or an attempt to evade the GENIUS Act’s prohibition on interest and yield payments. The OCC noted that other arrangements that are not captured by the presumption may also violate the statutory prohibition, or constitute an evasion thereof, and will be considered by the OCC on a case-by-case basis. To this end, the Proposed Rules would also prohibit engaging in any activity that the OCC determines is an evasion of the requirements of the GENIUS Act or the Proposed Rules. Although the OCC will retain this anti-evasion authority, it will be at the OCC’s discretion to employ it. The Proposing Release clarifies that the yield prohibition is not intended to prevent a merchant from independently offering a discount to a payment stablecoin holder for using payment stablecoins or a Stablecoin Issuer from sharing in the profits derived from the payment stablecoin with an unaffiliated partner in a white-label arrangement. To rebut the presumption, a Stablecoin Issuer could, for example, submit written materials that, in the OCC’s judgment, demonstrate that the contract, agreement, or other arrangement is not prohibited under the Proposed Rules and does not constitute an evasion thereof. The OCC’s broad discretionary authority and the lack of defined criteria to rebut the presumption are likely to render this area uncertain for the foreseeable future.
Other Prohibited Activities
Consistent with the GENIUS Act, the Proposed Rules would also prohibit Stablecoin Issuers from using deceptive names ( e.g., names that suggest that a payment stablecoin is legal tender or is guaranteed by the U.S. government) and pledging, rehypothecating or reusing any reserve assets. The broad prohibition on, and narrow exceptions to, pledging, rehypothecating, or reusing reserve assets highlights the structural differences between payment stablecoin issuers and banks, which employ fractional reserve lending.
Reserve Assets
The GENIUS Act requires Stablecoin Issuers to maintain identifiable reserves backing their outstanding payment stablecoins on at least a 1:1 basis. Under the Proposed Rules, Stablecoin Issuers must maintain reserve assets that:
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are identifiable;
are segregated from and not commingled with other assets owned or held by the Stablecoin Issuer; at all times have a total fair value that equals or exceeds the outstanding issuance value of the Stablecoin Issuer; and are either held directly by the Stablecoin Issuer or within the custody of an eligible financial institution.
Eligible Reserve Asset Categories
The Proposed Rules specify categories of permissible reserve assets consistent with the GENIUS Act, including:
U.S. coins and currency or money standing to the credit of an account with a Federal Reserve Bank; 11
deposits or insured shares payable upon demand at an insured depository institution;
U.S. Treasury bills, notes or bonds (“Treasuries”) with a remaining maturity of 93 days or less; money received from an overnight repurchase agreement (with the Stablecoin Issuer acting as the seller of securities) 12 collateralized by Treasuries with a maturity of 93 days or less; overnight reverse repurchase agreements (with the Stablecoin Issuer acting as the purchaser of securities) that are collateralized by Treasuries, “subject to overcollateralization in line with standard market terms”; 13 shares of investment companies registered under the Investment Company Act of 1940, as amended (“1940 Act”), “or other registered Government money market fund[s],” and that are invested solely in the type of eligible reserve assets enumerated above; 14 11 The Federal Reserve has requested public comment on a special purpose Reserve Bank account prototype (colloquially known as a “skinny master account”) tailored to the risks and needs of payments institutions. See Federal Reserve, Request for Information and Comment on Reserve Bank Payment Account Prototype , 90 FR 60096 (Dec. 23, 2025). 12 The Proposing Release notes that money from intraday repurchase agreements and intraday reverse repurchase agreements would be eligible reserve assets under the Proposed Rules. 13 Reverse repurchase agreements must also be either (i) tri-party; (ii) centrally cleared; or (iii) bilateral with a counterparty that the Stablecoin Issuer has determined to be adequately creditworthy even in the event of severe market stress. 14 Although registered government money market funds are eligible to be held as a reserve asset, the GENIUS Act imposes more stringent maturity requirements than those included in Rule 2a-7 under the 1940 Act (“Rule 2a-7”).
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any other similarly liquid federal government-issued asset approved by the primary federal stablecoin regulator; 15 and
certain eligible reserve assets enumerated above that are in tokenized form.
The Proposing Release encourages Stablecoin Issuers seeking clarity on whether a specific tokenized asset qualifies as a permissible reserve asset to request an opinion from the OCC. To aid transparency, the OCC is considering publishing a list of acceptable tokenized reserve assets.
Valuation, the 1:1 Requirement, and De-Pegging Risk
Under the Proposed Rules, reserve assets must be valued at fair market value (rather than another measure, such as amortized cost) for determining compliance with the 1:1 backing requirement. However, a Stablecoin Issuer’s outstanding issuance value must be measured at par, not at the secondary market price of the payment stablecoin. Therefore, if a payment stablecoin “de-pegs” from its intended stable value, the Stablecoin Issuer must nevertheless maintain reserves equal to the par value of all its outstanding payment stablecoins. The OCC states in the Proposing Release that this design choice is intended to prevent Stablecoin Issuers from reducing reserves if payment stablecoins de-peg, which could exacerbate run risk. The Proposed Rules would define “fair value” to mean fair value as determined under generally accepted accounting principles (“GAAP”). 16 Under GAAP, the fair value of shares of an investment company would typically be the fund’s net asset value per share, which is typically $1.00 per share for most government money market funds. 17 This requirement may make holding reserves in government money market funds advantageous for Stablecoin Issuers, particularly in certain interest rate environments.
Accessibility, Monetization and Withdrawal of Excess Reserve Assets
Under the Proposed Rules, a Stablecoin Issuer must demonstrate that it has the operational capability to access and monetize its reserve assets. The OCC notes in the Proposing Release that
15 The Proposed Rules would set relevant factors the OCC will consider in determining whether an asset qualifies, including: whether the asset has liquidity characteristics, including during times of stress, comparable to the other permissible reserve assets; whether Stablecoin Issuers will be operationally capable of monetizing the asset to meet redemption requests, including sudden and high-volume requests; whether the asset poses levels of risk comparable to other permissible assets, including interest rate risk and counterparty credit risk; and whether the asset introduces additional risks that may be difficult for Stablecoin Issuers to manage. 16 Under the Financial Accounting Standards Board’s Accounting Standards Codification (ASC) 820-10-20, fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” FASB, “Topic 820,” ASC 820-10-20. 17 Most government money market funds seek to maintain a stable price per share ( i.e. , $1.00) for purposes of distribution, redemption and repurchase by using the amortized cost and/or penny-rounding methods of valuation. Such money market funds must also calculate and publish on their website the fund’s net asset value per share rounded to four decimal places calculated using market-based pricing, ( i.e. , its “shadow price”); however, this is not the price at which the fund’s shares are purchased or redeemed.
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a Stablecoin Issuer may be able to demonstrate monetization in different ways, such as establishing that it maintains appropriate repurchase arrangements through which it can quickly generate cash to satisfy redemption requests. The OCC suggests that larger Stablecoin Issuers or those with more complex operations may need multiple monetization channels and/or may need to periodically conduct actual monetization transactions to demonstrate compliance with this requirement. The Proposed Rules would permit Stablecoin Issuers to withdraw excess reserve assets ( i.e. , reserves above the 1:1 floor) once per month only upon publication of a monthly composition report of its reserve holdings on its website pursuant to the Proposed Rules (as discussed below). The OCC states in the Proposing Release that self-reported determinations of excess reserves without independent certification, as required with the composition report, would undermine public confidence and create misconduct risk. However, this limitation would have significant implications for Stablecoin Issuers’ reserve management practices. For example, this lock-up period may disincentivize issuers from holding a large amount of excess reserves and may concentrate withdrawals immediately after publication of the monthly composition report.
Reserve Asset Diversification, Maturity, Liquidity
The GENIUS Act requires the OCC to adopt regulations implementing reserve asset diversification requirements. To this end, the OCC proposes two alternatives, only one of which will be adopted. The first option, which the OCC refers to as “Option A”, would codify a principles-based general requirement with an optional safe harbor containing quantitative requirements. Option A would also require an assessment of the risk of holding reserve assets at a limited number of financial institutions. The second option, “Option B”, would make the quantitative requirements from Option A’s safe harbor mandatory for all Stablecoin Issuers.
Safe Harbor or Minimum Requirements
Under Option A, a Stablecoin Issuer would be required to maintain reserve assets that are “sufficiently diverse to manage potential credit, liquidity, interest rate, and price risks.” Option A includes a “safe harbor” for compliance in which the Stablecoin Issuer would be deemed to meet the requirements if, on each business day, the Stablecoin Issuer maintains: at least 10% of its reserve assets as deposits or insured shares payable upon demand or money standing to the credit of an account with a Federal Reserve Bank (no more than 50% of this amount may be held at any one “eligible financial institution” 18 to qualify for the safe harbor);
18 Under the Proposed Rules, an “eligible financial institution” would be defined as a Federal Reserve Bank or a person that is eligible to hold reserve assets in custody under Section 10(a) of the GENIUS Act and complies with the applicable requirements. To be eligible under Section 10(a) of the GENIUS Act, a person must be subject to either: (i) supervision or regulation by a primary federal payment stablecoin regulator or the SEC or CFTC; or (ii) supervision by a State bank or credit union supervisor.
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at least 30% of its reserve assets as described above or amounts receivable and due unconditionally within five business days on pending sales of reserve assets, maturing reserve assets, or other maturing transactions;
no more than 40% of its reserve assets at any one eligible financial institution;
reserve assets with a weighted average maturity of no more than 20 days. 19
The OCC emphasizes in the Proposing Release that the requirements under Option A must be “tailored to the business model and risk profile,” and a smaller Stablecoin Issuer with a comparatively simple business model and lower risk profile may be able to satisfy the requirements of Option A without meeting the minimum requirements of the safe harbor. The quantitative safe harbor requirements, which were inspired by Rule 2a-7, essentially require that a Stablecoin Issuer maintain at least 10% of its reserve assets as “daily liquidity” and 30% as “weekly liquidity.” 20 As opposed to the principles-based approach of Option A, Option B would make the quantitative requirements of Option A’s safe harbor mandatory for all Stablecoin Issuers. Thus, if Option B is adopted, Stablecoin Issuers would be required to meet these quantitative requirements each business day.
Diversity of Custodial Arrangements
Option A would also require Stablecoin Issuers to monitor the risk associated with holding their reserve assets at a single or a small number of financial institutions. 21 This provision is intended to require Stablecoin Issuers to manage the risk that a financial institution is unable to or delayed in returning reserve assets to the Stablecoin Issuer that are needed to pay redemption requests. The OCC also notes that it would expect Stablecoin Issuers to “look through” any sub-custodial relationships to confirm that their reserves are held at a sufficiently diverse number of financial institutions. While Option A would not explicitly prohibit a Stablecoin Issuer from holding all of its reserve assets at a single financial institution (other than to comply with the provisions of the safe harbor), the OCC states that it “expects that it would be unlikely … [that a Stablecoin Issuer] … could satisfy the requirements in [the Proposed Rules] by placing all its reserve assets at a single eligible financial institution.” Further, the OCC notes that larger Stablecoin Issuers with complex
19 The OCC requests comment on whether it should adopt a specific definition of “weighted average maturity”, including whether it should incorporate maturity shortening provisions similar to Rule 2a-7. 20 The OCC’s proposed 10% “daily liquidity” and 30% “weekly liquidity” appear to be influenced by a prior version of Rule 2a-7. In 2023, the SEC adopted amendments to Rule 2a-7 which, among other things, increased the daily and weekly liquidity requirements for money market funds to 25% and 50%, respectively. 21 The Proposed Rules provide that reserve assets must either be held directly by the Stablecoin Issuer or within the custody of an “eligible financial institution.”
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operations may need to maintain their reserve assets at multiple financial institutions to appropriately manage this risk. 22
To qualify for the safe harbor, a Stablecoin Issuer must maintain no more than 40% of its reserve assets at any one eligible financial institution, whether “as deposits or insured shares at any one insured depository institution, securities custodied at any one eligible financial institution, bilateral reverse repurchase agreements with any counterparty, or through other exposures.” The Proposing Release indicates that a Stablecoin Issuer seeking to comply with this requirement would not be permitted to invest more than 40% of its reserve assets in a single government money market fund. 23 Because Option B would make the quantitative requirements mandatory, it would require a Stablecoin Issuer to maintain no more than 40% of its reserve assets at any one eligible financial institution.
Insured Deposits and/or Shares Requirement for Certain Stablecoin Issuers
The Proposed Rules would require a Stablecoin Issuer with $25 billion or more in outstanding stablecoins to maintain at least 0.5% of its reserve assets in the form of insured deposits or insured shares at an insured depository institution, up to a cap of $500 million. This requirement is designed to ensure that large Stablecoin Issuers have access to safe and liquid assets that can be withdrawn freely and that are not exposed to risks like interest rate risk. At the same time, the OCC acknowledges that, because of the finite number of eligible financial institutions as well as deposit insurance limits, it may not be feasible for a Stablecoin Issuer to have all of its deposits insured.
Consequences for Failure to Meet the Minimum Reserve Assets Requirements
A Stablecoin Issuer would be required to notify the OCC on any day on which its reserve asset amount has fallen below the required 1:1 minimum. Under these circumstances, a Stablecoin Issuer: would be barred from issuing new payment stablecoins until it had remediated the shortfall “except as necessary to facilitate a transfer of payment stablecoins from one distributed ledger to another and provided that the net outstanding issuance value does not increase”; and
22 The OCC in the Proposing Release provides the following factors that could increase complexity of a Stablecoin Issuer’s operations: the number of parties that redeem payment stablecoins for cash directly with the Stablecoin Issuer, the volume of redemptions (and volatility with respect to such volume), and the number and nature of the blockchains on which a payment stablecoin is traded. 23 See Proposing Release at p. 61 (In an example of a Stablecoin Issuer with $20 billion in outstanding payment stablecoins, “the permitted payment stablecoin issuer could not keep more than $8 billion in reserve assets at any one institution ( for instance, invested in a single investment fund )…” (emphasis added).
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if the shortfall lasts for 15 consecutive business days (which may be extended in the OCC’s sole discretion), must begin liquidating its reserve assets and redeem its outstanding payment stablecoins (without imposing a fee). If a Stablecoin Issuer fails to meet any of the reserve assets requirements, the Proposed Rules would authorize the OCC to require the Stablecoin Issuer to submit a plan describing how it will attain compliance and under what timeline. If the OCC determines that a Stablecoin Issuer faces a significant risk of being unable to comply with the reserve requirements “within a reasonable time period,” the OCC has the authority under the Proposed Rules to order the Stablecoin Issuer to initiate the redemption of all outstanding payment stablecoins and may also pursue other measures, including enforcement actions, if appropriate.
Custody
The Proposed Rules also include custody requirements, including requirements for asset protection, a private key control standard, and an exclusion for entities that provide hardware or software to facilitate payments. The custody requirements would apply broadly to OCC-regulated entities and Stablecoin Issuers (“Covered Custodians”) and specify what assets are permissible for custody and how required reserves must be held. Covered assets would include:
payment stablecoin reserves,
payment stablecoins used as collateral,
private keys used to issue payment stablecoins, and
all cash and other property received in the course of providing those services, including interest credited on reserve assets held in a deposit account at the custodian. The use of sub-custodians would be explicitly permitted under the Proposed Rules, though the Covered Custodian would be responsible for sub-custodian oversight including adoption and maintenance of safeguards and internal controls. Sub-custodians would be independently subject to the GENIUS Act’s custody requirements.
Asset Treatment, Segregation, and Omnibus Accounts
The Proposed Rules would require Covered Custodians to treat covered assets as customer property and separately account for each customer’s assets. Covered Custodians would be required to protect the covered assets of customers from creditor claims on a Covered Custodian and any sub-custodian through policies, procedures, and internal controls commensurate with the Covered Custodian’s size, complexity, and risk profile and the nature of the relevant covered assets. However, the Proposed Rules contain a carveout for when an insured depository institution holds cash as cash on deposit, in which case the prohibition on commingling will not apply. In effect, bank custodians would be permitted to hold reserve deposits in the ordinary course without triggering the prohibition on commingling. The Proposed Rules would allow any Covered Custodian to commingle multiple covered customers’ covered assets in one or more omnibus accounts so long as it maintains adequate safe and sound practices.
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The Private Key Control Standard
The Proposed Rules would require a Covered Custodian to maintain possession or control of covered assets of a covered customer that are held directly, including assets held in a digital wallet for which the Covered Custodian controls the associated private keys. A Covered Custodian or sub-custodian “maintains control” of a payment stablecoin or stablecoin reserve in tokenized form if it can reasonably demonstrate, consistent with the applicable standard of care, that no other party, including the covered customer, can transfer the payment stablecoin or tokenized asset using a distributed ledger without the custodian or sub-custodian’s consent. This proposed standard of control would be a higher bar to meet than that contained in the SEC Division of Trading and Markets’ December 2025 statement on broker-dealer custody of crypto asset securities, which required that broker-dealers only maintain policies, procedures, and controls reasonably designed to ensure that no other person, including a customer or third-party, has access to the relevant private keys or the ability to transfer the asset without authorization—a procedural standard rather than a technical-capability requirement. 24 This private key control standard would amount to the first formalized federal rulemaking with a technical control test and would have significant architectural implications for how digital asset custody structures are designed and operated. It is unclear what form this “reasonable demonstration” of exclusive control would take, and the Proposing Release provides no examples.
The Self-Custody Hardware and Software Exclusion
In line with the GENIUS Act, the Proposed Rules provide that the custody requirements do not apply to entities solely because they provide hardware or software to facilitate customer self- custody of payment stablecoins or private keys. Conversely, the OCC notes in the Proposing Release that the requirements could apply if an entity controls or holds itself out as controlling the assets or provides or holds itself out as providing safekeeping or custodial services. This includes ancillary or incidental custodial services (such as facilitating the customer's crypto-asset and fiat currency exchange transactions, transaction settlement, trade execution, recordkeeping, valuation, tax services, reporting, or other similar services).
Additional Operational Requirements
Capital Requirements
The Proposed Rules set out a proposed capital structure for Stablecoin Issuers with two tiers, including Common Equity Tier 1 (common stock, retained earnings, and accumulated other comprehensive income (“AOCI”)) and Additional Tier 1 (noncumulative perpetual preferred stock issuances classified as equity under GAAP). There would be no standardized established ratios between the tiers and no mandatory deductions under the Proposed Rules. Rather, the OCC would determine the capital requirements for each Stablecoin Issuer individually on a case-by-case basis. This would be consistent with the approach the OCC takes when determining minimum capital requirements for national banks at their chartering and would include an analysis of factors like financial projections, fixed and variable expenses, the nature of fiduciary products and services
24 See Statement on the Custody of Crypto Asset Securities by Broker-Dealers, SEC Division of Trading and Markets, (Dec. 17, 2025).
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being proposed, and discussions with organizers. 25 Stablecoin Issuers will also be required to develop a process to assess and meet their particular capital requirements, which will be evaluated by the OCC through the examination process, as discussed below. The initial minimum capital requirement will apply during a “de novo” period following the OCC’s chartering or licensing of a Stablecoin Issuer or, for state Stablecoin Issuers, following the transition to the OCC’s supervision. The de novo period will generally be three years, but may be extended or shortened by the OCC under certain circumstances. The Proposed Rules would include a $5 million floor on the minimum capital requirement during this de novo period. The Proposing Release acknowledges this floor is intended to ensure that Stablecoin Issuers have sufficient resources to support initial operations and cover losses arising during the early startup phases of new payment stablecoins. The Proposed Rules would also create an operational backstop requirement where Stablecoin Issuers would hold designated pools of highly liquid assets to maintain ongoing operations during a business disruption. This would be independent of de novo or ongoing capital requirements and would be assessed quarterly. The capital requirements would function as a loss-absorption tool, whereas the operational backstop would serve as a liquidity tool to facilitate timely redemptions in times of stress.
Redemptions
The Proposed Rules would impose redemption requirements on Stablecoin Issuers consistent with the GENIUS Act. The Act requires that a Stablecoin Issuer’s redemption policy be publicly disclosed, and the Proposed Rules would require certain information to be contained within the redemption policy. Such required information would include: the timeframe in which the Stablecoin Issuer will redeem payment stablecoins, which may not exceed two business days;
a statement that the timeframe may be extended in certain scenarios;
a statement that any discretionary limitations on timely redemptions can only be imposed by the OCC, or, for a state-regulated Stablecoin Issuer, by the OCC, Federal Reserve, or the applicable State regulator;
a statement with instructions on how a holder can redeem their payment stablecoins; and
the minimum number of stablecoins a Stablecoin Issuer will redeem. 26
Under the Proposed Rules, a Stablecoin Issuer generally must process a redemption within two business days after the date of the requested redemption. However, a Stablecoin Issuer that faces redemption requests in excess of 10% of its outstanding issuance value in a single 24-hour period would be required to provide notice to the OCC within 24 hours, and the redemption period would be automatically extended to seven calendar days following the requested redemption date. This
See OCC, Bulletin 2007-21 (June 26, 2007).
25
26 Under the Proposed Rules, an issuer must redeem a request for one or more stablecoins, but is permitted to set the minimum lower than one.
March 2026 / Page 14
extended period would apply to all redemption requests outstanding at the time the 10% threshold is reached, as well as any subsequent redemption requests. In such circumstances, a Stablecoin Issuer could process redemptions prior to the expiration of the seven-calendar days period only if the OCC determines that the Stablecoin Issuer can redeem sooner in an orderly fashion and through a fair and transparent process, or the OCC provides notice that the extended redemption period no longer applies. Separately, the OCC would have the discretion to extend the redemption period to any length if it determines that a Stablecoin Issuer poses a threat to safety and soundness or financial stability or that such extension would be in the public interest.
Website Reports and Audit Requirements
The Proposed Rules also include website reporting and audit requirements. A Stablecoin Issuer would be required to publish on its website, by noon of the last day of each month, a report consistent with a template included in the Proposed Rules (a “Report”) setting forth the composition of the issuer’s reserves and the total amount of outstanding payment stablecoins issued by the Stablecoin Issuer, in each case as of noon on the last day of the preceding month. The Report would also be required to include the average tenor and geographic location of custody of each category of reserve assets, which can be satisfied by disclosing the jurisdiction where reserve assets are custodied or located. A registered public accounting firm would need to examine the information in each Report, and its report would also need to be published on a Stablecoin Issuer’s website according to the same timeline as the examined Report. A Stablecoin Issuer’s chief executive officer and chief financial officer would need to submit a certification to the OCC that the information in each Report is accurate.
Examinations and Supervision
Stablecoin Issuers would be subject to an OCC examination at least once during every 12-month period, unless they meet the conditions for an extended cycle. 27 Examinations would involve an assessment of the issuer’s financial condition, nature of operations, risk management practices, compliance with regulations, and overall safety and soundness. The OCC may request prompt and complete access to all officers, directors, employees, agents, and relevant books and records of a Stablecoin Issuer. Stablecoin Issuers would be required under the Proposed Rules to submit: confidential weekly reports to the OCC regarding issuance, redemption, trading volume, and reserve assets; quarterly reports on financial condition including income statement, expenses, balance sheet, reserves, changes in equity, investments, capital, outstanding issuance value, and assets under custody; and
27 The extended cycle would be an 18- to 36-month cycle, as determined by the OCC, and be available to Stablecoin Issuers that are:
not under formal enforcement action, not recently subject to a control acquisition,
below $1 billion in outstanding issuance value or $25 billion in monthly trading volume, and
in full compliance with reserve and reporting requirements.
March 2026 / Page 15
reports upon the OCC’s request regarding financial conditions, risk monitoring and control systems, and regulatory compliance.
Risk Management
In line with the requirements of the GENIUS Act, the OCC also proposes principles-based risk management standards that would be tailored to the business model and risk profile of Stablecoin Issuers. Stablecoin Issuers would be required to have internal controls and information systems providing for organizational structure, risk assessment, reporting, safeguarding, and monetization of assets and compliance. Stablecoin Issuers would also be expected to maintain risk management systems to evaluate and monitor earnings. The Proposed Rules would also require Stablecoin Issuers to have internal audit systems with specific enumerated features. Further, the Proposed Rules would require Stablecoin Issuers to ensure that transactions with insiders or affiliates are not excessive, do not pose significant risks of material financial loss, are conducted on the same or at least as favorable terms to comparable transactions with non-affiliates, and are appropriately documented and reviewed by the Stablecoin Issuer’s board of directors. The Proposed Rules would also require safeguards for secure handling of digital assets and require Stablecoin Issuers to implement a technology and security program for monitoring and controls over sensitive information.
Conclusion
The Proposed Rules represent the first set of substantive regulations—and perhaps the most important—to implement the GENIUS Act. While the Proposed Rules provide clarity in certain areas, the OCC has asked over 200 specific questions in the Proposing Release, including in areas that are likely to have significant competitive, product design and operational implications. The stablecoin market has rapidly expanded in recent years—from less than $30 billion in 2020 to over $300 billion currently—and there are expectations of continued growth, particularly as markets move towards round-the-clock trading and more market participants use stablecoins to settle transactions in digital assets (including tokenized securities). The regulatory environment also continues to be favorable for payment stablecoins and other digital assets. 28 Accordingly, we expect significant engagement with the OCC on the Proposed Rules from market participants, including stablecoin issuers, digital asset exchanges, banking organizations and asset managers. Interested parties should carefully review the Proposing Release and consider the impact of the Proposed Rules on their current and future business plans.
Comments must be received by May 1, 2026.
28 See, e.g., Two Steps Forward for Broker-Dealers Holding Payment Stablecoins, Dechert OnPoint (Feb. 23, 2026) (discussing SEC Staff guidance that provides favorable net capital treatment for payment stablecoins held by broker- dealers); SEC Staff Maps Tokenization Models: Tokenized Securities are Still Securities; Models Matter, Dechert OnPoint (Feb. 25, 2026) (discussing SEC Staff joint statement offering guidance on how the federal securities laws apply to tokenized securities); Agencies Clarify the Capital Treatment of Tokenized Securities, OCC Press Release (March 5, 2026) (joint statement by federal bank regulatory agencies clarifying that an eligible tokenized security should generally receive the same capital treatment as the non-tokenized form of the security under the capital rule).
March 2026 / Page 16
This update was authored by:
Corey F. Rose Partner
Brenden P. Carroll Partner
Washington, D.C. +1 202 261 3314 corey.rose@dechert.com
Washington, D.C. +1 202 261 3458 brenden.carroll@dechert.com
Megha Kalbag Partner New York + 1 212 698 3870 mkalbag@dechert.com
Neel Maitra Partner
Washington, D.C. +1 202 261 3445 neel.maitra@dechert.com
Devon M. Roberson Associate
Austin G. McComb Associate
Washington, D.C. +1 202 261 3477 devon.roberson@dechert.com
Washington, D.C. +1 202 261 3430 austin.mccomb@dechert.com
Jessa Goldman Associate
\\\\
Washington, D.C. +1 202 261 7920 jessa.goldman@dechert.com
March 2026 / Page 17
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