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This requirement is designed to ensure that large Stablecoin Issuers have access to safe and liquid assets that can be withdrawn freely and that are not exposed to risks like interest rate risk.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).
March 2026 / Page 11
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