Banking, Payments and Fintech Update

U.S. Office of the Comptroller of the Currency Proposes Comprehensive Supervisory Framework for Payment Stablecoins Under GENIUS Act

March 6, 2026

On February 25, 2026, the U.S. Office of the Comptroller of the Currency (OCC) issued a Notice of Proposed Rulemaking (NPRM) that would establish a federal framework for issuance and administration of payment stablecoins by permitted payment stablecoin issuers (PPSIs). The NPRM would implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) by, among other things, establishing approval requirements, permissible and prohibited activities, reserve standards, redemption obligations, capital and operational safeguards, and reporting expectations for permitted payment stablecoin issuers. PPSIs also would be integrated into the OCC’s broader prudential framework, including its capital, assessment, and enforcement authorities.

The payment stablecoin industry should carefully review the proposal given that any final rule will undoubtedly influence chartering decisions, product design, and the competitive positioning of bank and nonbank issuers. The following alert offers a detailed analysis of the NPRM, but there are several key takeaways.

Yield Prohibition: The OCC is proposing to significantly expand upon the scope of the GENIUS Act’s yield prohibition and put in place an antievasion presumption that certain affiliate or third-party arrangements would constitute a prohibited payment of yield or interest.
PPSI “Customer”: Under the proposal, a “customer” of a PPSI would be a purchaser of a product or service “of” the PPSI rather than a purchaser “from” the PPSI, making all stablecoin holders “customers.”
One Brand/One Issuer: The OCC is considering requiring that separate issuers be established to support each white-label issuance of a payment stablecoin, a potentially significant cost item.
Uninsured Deposits as Reserve Assets: The proposal would set forth detailed rules regarding capital calculations and OCC assessments that in each case significantly disfavor uninsured deposits in ways that in are tension with the concept of using deposits as a key source of liquidity.
Redemption Requirements: The OCC’s two-business-day redemption timeframe cannot be exceeded without OCC approval, except if redemption requests exceed 10% of outstanding issuance within a 24-hour period, in which case redemptions must be delayed for seven days unless approved by the OCC. This imposes significant procedural hurdles on some of the most urgent decision-making that may face a PPSI.
Prudential Regulation of Stablecoin Issuance: As a whole, the NPRM makes clear that implementation of the GENIUS Act will result in meaningful prudential supervision and regulation of PPSIs. This type of supervision and regulation will be familiar to banking organizations, but imposes material economic and financial constraints on stablecoin issuance that may be challenging for market participants that are less familiar with the prudential banking framework. The comment process before the NPRM is finalized is likely to have meaningful consequences for how burdensome this framework ultimately will be.

Comments on the NPRM, including 211 specific questions for feedback, are due by May 1, 2026. The OCC also notes that additional anti-money laundering (AML) and sanctions compliance frameworks will likely be addressed in a coordinated rulemaking with other agencies.

I. Background: Congress Granted the OCC Jurisdiction Over Certain PPSIs

Congress enacted the GENIUS Act on July 18, 2025, seeking to create a federal statutory framework for the issuance of “payment stablecoins,” defined as digital assets designed to be used as a means of payment or settlement and backed by specified reserve assets. In establishing this framework, Congress sought to formalize federal oversight of stablecoin issuance while reinforcing the distinction between payment instruments and investment products. The GENIUS Act assigns primary supervisory responsibility to the federal banking agencies for entities within their respective jurisdictions. For the OCC, this includes oversight of PPSIs.¹ The GENIUS Act gives the OCC the most prominent role among the regulators responsible for its implementation and accordingly this NPRM will be among the most important rulemakings seeking to implement the GENIUS Act.

II. Prohibition on Payment of Certain Interest or Yield

Statutory Ban on Certain Interest or Yield

One of the most scrutinized provisions of the GENIUS Act is the prohibition against a PPSI or foreign payment stablecoin issuer “pay[ing] the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin.”² In a controversial approach, the NPRM significantly expands on the scope of the yield prohibition through certain anticircumvention “presumptions.”

Anticircumvention Safeguards

The NPRM goes beyond a straightforward application of the statutory limits on PPSIs themselves, instead suggesting that certain payments made by PPSI “affiliates” (which would be defined based on the Federal Reserve Board’s control rules under the Bank Holding Company Act) or “related third parties” would be similarly restricted in certain circumstances that trigger a “presumption” that the affiliate or related third party is simply acting on behalf of the PPSI.

Specifically, the proposal would establish a rebuttable presumption that certain arrangements with affiliates or related third parties that provide interest or “yield” (a term that is never defined) to a stablecoin holder “solely in connection with the holding, use, or retention” of the payment stablecoin are prohibited evasions of the statutory restriction on the PPSI itself. Importantly, the proposed regulation refers to a related third party paying interest or yield “as a service,” which the NPRM preamble indicates means “on behalf of the permitted payment stablecoin issuer.” Alternatively, a third party could be covered if the PPSI issues stablecoins “on behalf” of the third party (also not defined) or under that third party’s branding. The preamble differentiates this from a merchant that “independently offer[s] a discount to a payment stablecoin holder for using payment stablecoins.”

A PPSI may rebut the presumption by submitting written materials demonstrating that the arrangement is not prohibited and is not intended to circumvent the rule. The OCC retains authority to evaluate such arrangements on a case-by-case basis, including in light of the issuer’s overall business model and risk profile.

Industry Criticism and Supervisory Posture

The prohibition is likely to be one of the most debated aspects of the proposal. Critics may argue that the ban is overly broad, particularly in its application to affiliate or third-party arrangements that provide rewards, rebates, or other economic incentives not formally characterized as “interest.”

At the same time, the NPRM reflects concern that allowing stablecoin issuers to replicate deposit-like yield structures, whether directly or indirectly, could undermine the statutory distinction between payment stablecoins and traditional bank deposits. Even if the OCC retracts or modifies the rebuttable presumption framework in the final rule, PPSIs and other intermediaries will need to consider the extent to which the sentiments expressed in the NPRM will animate enforcement of the final rule.

This approach could materially constrain rewards, rebate, and co-branded distribution models and will be a focus of comments.

III. Activities Covered and Permitted Scope

Core Permitted Activities

The NPRM authorizes PPSIs to engage in activities permitted under the GENIUS Act and approved by the OCC in connection with payment stablecoin issuance. At a minimum, this includes

issuance of payment stablecoins
redemption of outstanding payment stablecoins
management of required reserve assets
provision of custody and safekeeping of reserve assets and related stablecoin assets
operational functions necessary to support issuance, redemption, and reserve compliance such as assessing associated fees

In addition, the NPRM clarifies that the following activities are also permitted: (i) assessing fees associated with purchasing or redeeming payment stablecoins; (ii) acting as principal or agent with respect to any payment stablecoin (including acting as agent of a customer with respect to redemption of a payment stablecoin issued by a third party); and (iii) paying fees to facilitate customer transactions.

The NPRM incorporates Section 16(a) of the GENIUS Act, stating that nothing in the enumerated permissible activities may be construed to limit the authority of a depository institution, national bank, or trust company to engage in activities permissible pursuant to applicable state and federal law. However, in the preamble to the NPRM, the OCC also states that an insured national bank or federal savings association seeking to issue a payment stablecoin would have to do so through a subsidiary, as required under the GENIUS Act. The NPRM does not address how the subsidiary should be categorized for purposes of OCC regulations, leaving insured national banks and federal savings associations to determine whether such a subsidiary should be an operating subsidiary or some other type of subsidiary, which can impact the regulatory treatment under other frameworks. This limitation on insured national banks and federal savings associations would not apply to an uninsured national bank that is a permitted stablecoin issuer.

The NPRM makes clear that stablecoin activities must be conducted within the statutory framework of the GENIUS Act and remain subject to OCC approval, supervision, and ongoing compliance with reserve, capital, and operational requirements. To the extent a PPSI seeks to engage in other digital asset service provider activities, those activities must be independently authorized under applicable federal or state law and remain subject to OCC supervisory approval.

Potential Restrictions on White-Labeled and Multibrand Stablecoins

The OCC is seeking comment on whether a PPSI should be limited to issuing only a single “brand” of payment stablecoin. The proposal acknowledges that some issuers currently structure white-label or co-branded arrangements in which a PPSI issues stablecoins under a partner’s brand.

The NPRM notes that while white-label structures may allow market participants to leverage an issuer’s infrastructure and risk management capabilities, such structures may also create uncertainty regarding reserve backing and increase contagion risk across branded products. In addition to seeking comment on a one-brand restriction of payment stablecoins per legal entity, the proposal also solicits comment on potential structural safeguards, including requiring separate legal issuers for each brand or mandating bankruptcy-remote reserve vehicles to isolate reserves attributable to a particular brand.

If finalized in its proposed restrictive form, this approach could significantly affect existing white-label stablecoin programs and may require PPSIs to restructure co-branded arrangements into separate, legally distinct entities at significant cost.

IV. PPSI Application and Approval Framework

The NPRM would establish a formal application and approval process for entities seeking to become, or to operate a subsidiary as, a PPSI. The proposed framework implements Section 5 of the GENIUS Act and creates a structured licensing regime with defined timelines, review factors, and appeal rights.

Who Must Apply?

The application requirement would apply to

insured national banks, federal savings associations, and insured federal branches of foreign banks seeking approval for a subsidiary to become a PPSI
nonbank entities seeking to operate as federal qualified payment stablecoin issuers under OCC supervision
uninsured national banks and uninsured federal branches seeking federal authorization to issue payment stablecoins

In each case, these institutions would not be able to commence stablecoin issuance absent approval.

Application Mechanics

The NPRM sets forth detailed application requirements. Applicants must submit specified information regarding the entity and its proposed stablecoin activities, including biographical, financial, and organizational information.

The application must include information concerning the applicant’s directors, executive officers, and principal shareholders. “Principal shareholder” is defined to include persons who directly or indirectly control 10% or more of the voting stock, including those acting in concert. Individuals falling within this definition must submit required biographical and financial disclosures, and the OCC may require submission of fingerprints for criminal background checks.

Applicants must provide sufficient information to enable the OCC to evaluate the proposed activities under the statutory review factors. If an application is not substantially complete, the OCC must notify the applicant of the information required to render it substantially complete.

The “Substantially Complete” Standard and 120-Day Review Clock

The GENIUS Act requires the OCC to render a decision within 120 days of receiving a substantially complete application, and the proposal codifies the mechanics of that standard.

Within 30 days of receiving an application, the OCC must notify the applicant whether the submission is substantially complete. If not, the OCC must identify the additional information required. Once the applicant provides the necessary information, the OCC must notify the applicant within 30 days whether the application is now substantially complete.

An application is deemed substantially complete as of the date the OCC receives the information required to make it so. The 120-day review period begins to run from that date, not from the date of initial submission. The rule further provides that an application remains substantially complete unless there is a material change in circumstances requiring the OCC to treat it as a new application.

If the OCC fails to render a decision within 120 days of receipt of a substantially complete application, the application is deemed approved by operation of law. The OCC explains that measuring the 120-day period from substantial completeness prevents applicants from providing critical information late in the review process and ensures meaningful OCC evaluation.

Substantive Review Factors

In evaluating a substantially complete application, the OCC considers the factors prescribed by Section 5(c) of the GENIUS Act and incorporated into the NPRM. These include:

the ability of the applicant (or, for insured depository institutions, the relevant subsidiary) to meet the requirements of Section 4 of the GENIUS Act, based on its financial condition and resources
whether any officer or director has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud
the competence, experience, and integrity of officers, directors, and principal shareholders, including their record of compliance with laws and regulations and their ability to fulfill commitments imposed in connection with the application or prior approvals
whether the applicant’s redemption policy meets the standards set forth in the GENIUS Act and NPRM
any additional factors necessary to ensure the safety and soundness of the PPSI

OCC Investigation Authority

Consistent with the OCC’s general licensing regulations, the NPRM would authorize the agency to examine, investigate, and evaluate facts relating to an application as necessary to reach an informed decision. This includes the authority to collect fingerprints for criminal background checks and to request additional information during the review process.

The NPRM also contemplates ongoing supervisory oversight following approval, including mechanisms to address changes in control of a PPSI (which would be similar to the regime established by the Change in Bank Control Act) and other developments that could affect the issuer’s compliance with statutory requirements.

Denial and Appeals Process

The OCC may deny a substantially complete application if it determines that the proposed activities would be unsafe or unsound based on the statutory review factors.

If the OCC denies an application, it must provide written notice within 30 days explaining the denial with specificity, including findings regarding identified material shortcomings and actionable recommendations for addressing those deficiencies.

An applicant may request a written or oral hearing to appeal a denial within 30 days of receiving notice. The OCC must schedule the hearing within 30 days of a timely request. Following the hearing, the Comptroller (or authorized delegate) conducts a de novo review of the record and must issue a final written determination within 60 days of the hearing. If the applicant does not timely request a hearing, the denial becomes final. A denial does not preclude submission of a subsequent application.

V. Reserve Safeguards and Asset Requirements

Consistent with the GENIUS Act, the NPRM would impose detailed requirements governing the composition, segregation, and use of reserve assets backing payment stablecoins. These provisions are central to the statute’s objective of ensuring full backing, mitigating run risk, and distinguishing payment stablecoins from deposit liabilities or investment products.

High-Quality Liquid Assets

Under the proposal, PPSIs must maintain reserves sufficient to fully back the outstanding issuance value of their payment stablecoins on at least a 1:1 basis at all times. Reserve assets must consist of high-quality liquid assets that meet statutory and regulatory criteria. Importantly, other payment stablecoins do not themselves qualify in this regard.

The NPRM incorporates the GENIUS Act’s limitations on eligible reserve assets, which are confined to specified short-duration, low-risk instruments and cash equivalents. In particular, securities held as reserve assets are limited to instruments with short remaining maturities, consistent with the statute’s emphasis on liquidity and price stability. In addition to adopting the types of permitted reserves under the GENIUS Act, the NPRM would also set forth considerations for the OCC in determining other similarly liquid federal government-issued assets that could be held as part of the reserve base.³ Specifically, the proposal states that reserve assets must only comprise:

U.S. coins and currency or money standing to the credit of a Federal Reserve Bank
funds held as deposits or insured shares payable upon demand at an insured depository institution
Treasury bills, Treasury notes, or Treasury bonds with a remaining maturity of 93 days or less
money received under repurchase agreements, with the PPSI acting as a seller or securities and with no longer than overnight maturity, backed by Treasury bills with a maturity of 93 days or less
reverse repurchase agreements, with the PPSI acting as a purchaser of securities and with no longer than overnight maturity, collateralized by Treasury bills, Treasury notes, or Treasury bonds on a no longer than overnight basis, subject to overcollateralization in line with standard market terms
securities issued by an investment company registered under the Investment Company Act of 1940 or other registered government money market fund that are invested solely in the above listed assets
any other similarly liquid federal government-issued asset approved by the OCC in consultation with a state payment stablecoin regulator, if applicable, of the PPSIAny reserve described above in tokenized form, except for money received under repurchase agreements and reverse repurchase agreements, provided they comply with all applicable laws and regulations

The proposal also incorporates reporting and disclosure requirements based on the statute designed to ensure transparency regarding the amount, composition, and tenor of reserve assets.

Full backing is measured against the total consolidated par value of outstanding payment stablecoins. The reserve requirement is therefore dynamic and must be continuously maintained in an amount sufficient to support redemption obligations. The NPRM measures reserve sufficiency based on the fair value of reserve assets under GAAP. These limitations are intended to ensure full backing of outstanding stablecoins, reduce run risk, and prevent consumer confusion regarding the safety or insured status of payment stablecoins.

The NPRM also proposes and requests comment on two alternative diversification and concentration approaches for reserve assets: (1) a principles-based framework with an optional safe harbor and (2) a mandatory quantitative concentration regime. It seeks comment on which approach better balances liquidity resilience and operational flexibility. Notably, the OCC’s “diversification” concepts go well beyond single issuers of reserve assets to diversification among fund managers and reserve asset custodians and subcustodians.

Requirements for Reserves

Institutions would need to maintain reserve assets backing payment stablecoins to support redemption obligations and which could not be used for unrelated business purposes. The NPRM would adopt the GENIUS Act restriction on pledging, reusing, or otherwise encumbering reserve assets except in limited, supervised circumstances expressly permitted by the statute and the proposed rule. Reserve assets must be identifiable and segregated from the issuer’s corporate assets. In addition, the NPRM would require that reserves be accessible to meet redemption demands and would impose a limitation on withdrawal of excess reserves to no more than once per month for amounts in excess of outstanding the total consolidated par value of all of a PPSI’s payment stablecoins. The NPRM provides that any such withdrawal may be made only “upon” the month-end publication of a reserve asset composition report, raising the question as to how soon after the publication such withdrawal must be made.

Recordkeeping and Reporting

Issuers must maintain clear records demonstrating the amount and composition of reserves and must publish at the end of each month reserve information and an accompanying certification of a registered public accounting firm.

Redemption Mechanics and Operational Readiness

The statute and NPRM require that each PPSI maintain a clear and publicly disclosed redemption policy. The NPRM establishes standards for redemption, including requirements relating to timing, transparency, and process. Issuers must demonstrate the operational capability to access and monetize reserve assets in order to meet reasonable expectations of redemption requests.

Redemption policies must provide for prompt redemption of payment stablecoins in U.S. dollars and may not exceed a two-business-day timeframe absent exceptional circumstances. Redemption periods automatically extend to seven calendar days if redemption requests exceed 10% of outstanding issuance within a 24-hour period. Importantly, once the seven-day period is triggered, redemption cannot proceed earlier than the end of the seven-day period without OCC approval, which raises important risk and market perception issues. Any delay in redemption beyond the two-day period for other reasons must be approved by the OCC, which also raises timing issues if technical issues are affecting redemption mechanics.

VI. Capital and Operational Backstop Requirements

PPSIs coming under OCC supervision would be subject to specific capital and operational backstop requirements, which are designed to ensure that PPSIs maintain a meaningful loss-absorbing buffer independent of required reserve assets and hold sufficient liquid resources to sustain operations during a disruption. For newly organized PPSIs, the OCC will set minimum capital requirements via approval orders that will continue to bind the PPSI for three years. After that, capital requirements will be set through the supervisory process. This is similar to how the OCC sets capital requirements for national trust banks.

Capital Requirements

The proposed rule requires that the minimum capital requirement consist exclusively of common equity tier 1 (CET1) capital and additional tier 1 (AT1) capital. The OCC does not propose to permit tier 2 capital elements, such as subordinated debt instruments, for PPSIs. The agency explains that allowing subordinated debt could introduce leverage and repayment pressures inconsistent with the intended loss-absorbing function of capital in this framework. The OCC also seeks input, however, regarding various adjustments that might be made in light of specific risk characteristics of various reserve assets. For example, the OCC specifically seeks comment as to whether a variable capital component should be tied to credit risk of certain reserve assets such as uninsured deposits or to interest rate or liquidity risks.

CET1 Capital

The proposed CET1 criteria are closely modeled on traditional bank capital standards but tailored for the stablecoin context.

CET1 capital would consist of

common stock instruments (plus related surplus) meeting specified criteria, including being fully paid-in, perpetual, the most subordinated claim in liquidation, and not redeemable except with prior OCC approval
retained earnings
accumulated other comprehensive income, without neutralization or opt-out

The instruments must be classified as equity under generally accepted accounting principles (GAAP), fully discretionary with respect to dividends, and structured to ensure genuine loss absorbency. The OCC emphasizes parity across bank subsidiaries, uninsured national banks, national trust banks, and nonbank PPSIs.

AT1 Capital

AT1 capital would consist of perpetual, subordinated instruments meeting specified criteria, generally consistent with noncumulative perpetual preferred stock classified as equity under GAAP. These instruments

must be subordinated to stablecoin holders and general creditors
cannot have a maturity date
may be callable only after at least five years and only with prior OCC approval
must not create an expectation of redemption
must permit fully discretionary dividends

Unlike the OCC’s capital framework for national banks, the proposal does not allow PPSIs to count tier 2 capital instruments.

No Risk-Weighted or Asset-Based Capital Ratio

Importantly, the NPRM would not establish prescriptive, quantitative minimum capital ratios or a risk-weighted asset framework.⁴ Instead, the OCC proposes a structure consistent with its chartering approach for uninsured national trust banks, focusing on total equity capital amounts tailored to the issuer’s risk profile. The capital maintained must be commensurate with the level and nature of risks to which the issuer is exposed, including off-balance-sheet risks. This approach reflects the GENIUS Act’s requirement that capital be tailored to the issuer’s risk profile rather than derived from a traditional asset-based capital ratio. However, uninsured national trust banks must affirmatively opt in to this capital structure rather than Part 3 of the OCC regulations.

The NPRM also would amend 12 CFR Part 3 to address insured national banks and federal savings associations consolidated with a PPSI. Such institutions would be required to deconsolidate the PPSI for capital ratio purposes, deduct undistributed PPSI retained earnings from common equity tier 1 capital, and exclude investments in and receivables from the PPSI from risk-weighted and leverage calculations. These adjustments are designed to prevent stablecoin subsidiary activities from inflating insured bank capital ratios.

Minimum Capital Floor

In addition to defining eligible capital elements, the statute establishes a minimum capital floor of $5 million. The NPRM implements this statutory minimum while preserving the OCC’s discretion to require higher capital levels based on the issuer’s business model, scale, operational complexity, and risk profile.

The proposal clarifies the conceptual distinction between capital and reserves. Required reserve assets are designed to back outstanding stablecoins and support redemption. Capital, by contrast, serves as an ongoing loss-absorbing buffer that protects the issuer against operational, legal, and other risks unrelated to reserve sufficiency. The OCC may condition approval of an application on heightened capital commitments and may impose additional capital or backstop requirements for individual issuers where warranted.

Operational Backstop

The NPRM would create operational backstop requirements for PPSIs in addition to reserve and regulatory capital requirements.

Under the proposed framework, a PPSI would need to maintain a designated pool of highly liquid assets sufficient to sustain operations during a business disruption. The operational backstop would need to be

independent of required reserves and capital
calculated based on the issuer’s total actual operating expenses over the prior 12 months
recalculated quarterly based on the most recent four quarterly reports (or reasonable projections for de novo issuers)
held in readily available liquid assets, such as U.S. currency, balances at a Federal Reserve Bank, fully insured demand deposits at a U.S. insured depository institution, or short-term U.S. Treasury securities qualifying as reserve assets

The OCC explains that the independent operational backstop obligation is necessary for providing a liquidity runway, typically sufficient to cover several months of operating expenses, to allow the issuer to stabilize operations and evaluate response options during a disruption without resorting to emergency measures.

VII. Custody Services

Under the NPRM, a PPSI may provide custodial or safekeeping services for

payment stablecoins
required reserve assets
private keys associated with payment stablecoins
cash and other property received in the course of the provision of custodial or safekeeping services for such assets⁵

Custody arrangements must comply with applicable federal and state law. A custodian must take appropriate steps to protect the covered assets of customers from the claims of creditors of the covered custodian and any subcustodian and must maintain possession or control of the covered assets of a customer that are held directly (and may maintain covered assets through a subcustodian if consistent with applicable law). The separate custody provisions of the NPRM raise unresolved questions, however, regarding potential conflicts between OCC regulation of the issuer and another agency’s oversight of the custodian itself.

VIII. Extensive Request for Comment

The NPRM includes more than 200 questions for public comment, covering virtually every dimension of the proposed framework, from reserve composition and redemption mechanics to capital calibration, custody operations, affiliate arrangements, and cross-border supervision.

The breadth of the request signals that the OCC is actively soliciting input on

how prescriptive reserve and operational standards should be
where guardrails should be tightened or relaxed
how to balance prudential oversight with operational flexibility
how the incidental activity authority should be interpreted in practice
how the yield prohibition should apply to affiliate and third-party arrangements
whether “white label” stablecoins must be issued out of separate legal entities

As a result, meaningful aspects of the final rule may evolve in response to public feedback. Moreover, numerous details of the NPRM have important implications for the future of stablecoin issuance and utility.

Sidley is actively working with clients to assess the implications of the NPRM on their businesses and provide meaningful comments through the (short) public comment period. Please reach out to any of the authors of this update if you would like to discuss further.

Knowledge management lawyer Josh Kotin contributed to this Sidley Update.

¹A “permitted payment stablecoin issuer” or “PPSI” is (i) a subsidiary of an insured national bank or federal savings association that has been approved to issue payment stablecoins; (ii) a federal qualified nonbank payment stablecoin issuer, including a person that is not a depository institution nor subsidiary of a depository institution (other than a state qualified payment stablecoin issuer) and an uninsured national bank that is chartered by the OCC; or (iii) a state qualified payment stablecoin issuer subject to the OCC’s regulatory or enforcement authority, that is, a nonbank entity established under the laws of a state and approved to issue stablecoin by a state payment stablecoin regulator with more than $10 billion in total consolidated par value of all of such issuer’s payment stablecoins. In addition, the OCC will have authority over a foreign stablecoin issuer that issues payment stablecoin in the United States and is not subject to the prohibitions on issuance under the GENIUS Act. Such a foreign payment stablecoin issuer would have to register with the OCC as provided under the NPRM.

²GENIUS Act § 4(a)(11).
³The considerations include whether (i) the asset has liquidity characteristics, including during times of stress, comparable with the other reserve assets allowed; (ii) permitted payment stablecoin issuers will be operationally capable of monetizing the asset to meet redemption requests, including sudden and high-volume requests; (iii) the asset poses levels of risk comparable to those of allowed assets, including interest rate risk and counterparty credit risk; and (iv) whether the asset introduces additional risks that may be difficult for permitted payment stablecoin issuers to manage.
⁴There is some ambiguity regarding the status of reserve assets as on-balance sheet. While the proposed regulation itself appears to be based on on-balance sheet treatment, the preamble indicates that the OCC “generally anticipates” that to be the case.
⁵As indicated above, uninsured national trust banks have separate custody authority for other forms of digital assets.

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