What Banks Need to Know About the OCC’s Final Stablecoin Rules and Licensing Guidance

Summary

On October 21, 2026, the Office of the Comptroller of the Currency (OCC) issued its final rule implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) for payment stablecoin issuers and custodians subject to its jurisdiction (OCC Bulletin 2026-50). The OCC is the first federal regulator to issue comprehensive final rules under the GENIUS Act, and other agencies’ pending proposals heavily reference the OCC’s standards.

The final rule becomes effective January 18, 2027, the same day the GENIUS Act takes effect. Alongside the rule, the OCC issued Bulletin 2026-51 addressing waivers and application submissions, and Bulletin 2026-52 revising reporting forms for issuers.

The OCC’s final rule transforms the GENIUS Act from a statutory framework into an operational regulatory regime. It establishes detailed requirements governing stablecoin issuance, reserves, liquidity, redemption, custody, governance, capital, and reporting. Because only approved issuers may offer payment stablecoins after January 18, 2027, and violations may carry significant enforcement consequences, banks, fintechs, and existing stablecoin issuers should evaluate their compliance and strategic positioning now.

Most importantly, the rule creates multiple avenues for bank participation in the stablecoin ecosystem, including as issuers, reserve depositories, custodians, and service providers. Institutions that begin planning now will be better positioned to navigate the January 2027 implementation deadline and the broader shift toward regulated digital payment infrastructure.

Key Dates

Dates	Milestone
October 21, 2026	OCC final rule issued
January 18, 2027	GENIUS Act effective date
January 18, 2027	OCC final rule effective date
January 18, 2027	Stablecoin issuance generally requires approval or waiver
January 25, 2027*	Anticipated start of PS-01 weekly reporting
March 31, 2027*	Anticipated start of PS-02 quarterly reporting

*Subject to OMB approval.

Background: The GENIUS Act

The GENIUS Act, signed into law on July 18, 2025 (12 U.S.C. 5901 et seq.), is the first comprehensive federal regulatory framework for payment stablecoins. Beginning January 18, 2027, only approved issuers may offer payment stablecoins in the United States.

Approved issuers generally are either Permitted Payment Stablecoin Issuers (PPSIs) or registered foreign payment stablecoin issuers.

What Is a Payment Stablecoin?

A “payment stablecoin” is a digital asset recorded on a cryptographically secured distributed ledger that is, or is designed to be, used as a means of payment or settlement, and whose issuer:

1. Is obligated to convert, redeem, or repurchase the asset for a fixed amount of monetary value; and
2. Represents, or creates a reasonable expectation, that the asset will maintain a stable value relative to a fixed amount of monetary value.

The term excludes national currencies, deposits (including deposits recorded through distributed ledger technology), and securities subject to federal securities laws.

In practice, a fiat-backed stablecoin is generally created when a customer deposits dollars with the issuer, which holds corresponding reserves in cash and other permissible assets such as Treasury bills. Stablecoins are redeemed when token holders return them to the issuer in exchange for dollars. The GENIUS Act requires reserves sufficient to support redemption obligations on a one-to-one basis.

Who May Issue Payment Stablecoins

The GENIUS Act permits issuance by:

• Subsidiaries of insured depository institutions (IDIs);
• OCC-approved federal qualified issuers; and
• State qualified issuers operating under a state regime that is deemed “substantially similar” to the federal framework, with issuance below the $10 billion threshold.

Core Statutory Requirements

The Act imposes requirements relating to permitted activities, one-to-one reserve backing, a prohibition on paying interest or yield to holders, AML/KYC and sanctions compliance, marketing and disclosure practices, monthly reserve disclosures certified by the CEO and CFO, and redemption procedures.

The Act also establishes custody requirements. Custodians must be federally or state supervised, treat covered assets as customer property, keep separate books and records, avoid impermissible commingling, maintain possession or control of customer assets and private keys, oversee sub-custodians, and report to their primary supervisor.

The OCC Final Rule

Overview and Scope

The final rule follows the OCC’s February 25, 2026 proposal and establishes a new 12 CFR Part 15 (Payment Stablecoins) while amending Parts 3, 6, 8, and 19. At approximately 700 pages, it is nearly twice the size of the proposal and addresses virtually all OCC obligations under the GENIUS Act other than BSA/AML and OFAC requirements, which are the subject of separate interagency rulemaking.

The rule applies to national banks, federal savings associations, federal branches and agencies, subsidiaries of OCC-regulated institutions, federal qualified payment stablecoin issuers, certain state qualified issuers, foreign payment stablecoin issuers, and covered custody activities.

Part 15 has five subparts: purpose, scope, and definitions (Subpart A); issuer operations, reserves, redemption, risk management, audits, and reporting (Subpart B); custody (Subpart C); applications and registrations (Subpart D); and capital and operational backstop (Subpart E).

Key Changes from the Proposal

Topic	Action	Key Terms
Yield prohibition	Rebuttable presumption that affiliate and related third-party arrangements violate the ban	Presumption removed; facts-and-circumstances review
Diversification	Choice of principles-based or quantitative approach	Principles-based approach plus targeted quantitative requirements
Daily liquidity	At least 10% in demand deposits or Federal Reserve Bank balances	At least 5%
Concentration	40% per eligible financial institution	40% per counterparty, with custody exceptions
Other quantitative limits	Weekly liquidity and maturity limits	Replaced with stress testing framework
Surplus withdrawals	Monthly	Permitted at any time subject to controls
Capital compliance	Measured quarterly	Measured at all times; simplified elements

 

Key Takeaways

• Yield Restrictions Remain. The GENIUS Act prohibits issuers from paying interest or yield directly to stablecoin holders. The OCC removed its proposed rebuttable presumption that affiliate or third-party reward programs violate the statute. Instead, those arrangements will be evaluated on a case-by-case basis. The OCC also indicated that additional guidance or future rulemaking may be forthcoming.
• One-to-One Reserves Mean One-to-One at All Times. The final rule confirms that reserve requirements apply continuously. Issuers may not operate with intraday reserve deficiencies and should consider maintaining excess reserve buffers to manage operational and redemption risks.
• Reserve Assets Remain Narrowly Defined. Corporate securities remain ineligible as reserves, and the OCC declined to impose a blanket haircut on tokenized reserves. The agency retains discretion to impose conditions on the use of certain reserve assets.
• Liquidity and Stress Testing Receive Greater Emphasis. The final rule shifts from rigid quantitative liquidity requirements toward a comprehensive stress-testing framework. Issuers must maintain monetization plans and notify the OCC when redemptions exceed 10% within a 24-hour period.
• New Capital Framework. The final rule adopts a simplified but continuous capital and operational backstop requirement designed to ensure that issuers can continue operating and redeeming stablecoins during stress events.
• Expanded Custody Guidance. The OCC expressly permits certain omnibus account structures and accommodates special purpose vehicle (SPV) issuer arrangements, provided appropriate safeguards are maintained.
• Consumer Protection. The scope of applicable consumer protection laws remains unchanged.

Implications for Banks

The final rule creates several distinct paths for OCC-supervised banks:

• Option 1: Issue Stablecoins Through a Subsidiary. An insured national bank generally may not issue payment stablecoins directly. Instead, issuance must occur through an approved subsidiary.

A new issuer must satisfy minimum capital requirements, a 12-month operating expense backstop, two-day redemption, reserve and liquidity standards, and ongoing reporting and attestation obligations.

For some organizations, issuance may create opportunities to develop payment platforms, treasury solutions, and digital cash products while insulating the parent bank’s capital structure.

• Option 2: Serve as a Reserve Depository. For many banks, acting as a reserve depository may represent the most attractive near-term opportunity.

Stablecoin issuers will require institutions capable of holding substantial reserve balances that remain available on demand. Serving in this role may generate significant institutional deposits without requiring the bank to become a stablecoin issuer.

Banks should, however, evaluate liquidity implications, deposit volatility, concentration risk, contingency funding, and potential large-scale redemption events.

• Option 3: Provide Custody Services. National banks that hold reserves, stablecoins pledged as collateral, or private keys may qualify as covered custodians.

These institutions should assess segregation requirements, written custody agreements, key-management controls, sub-custodian oversight, recordkeeping, and operational resiliency.

• Option 4: Technology and Infrastructure Partnerships. Many institutions may elect to support stablecoin activity indirectly through white-label arrangements, payments infrastructure, treasury services, or technology partnerships.

These relationships still require careful evaluation under existing third-party risk management expectations.

• Option 5: Take No Action. Some institutions may decide that direct participation in stablecoin activities does not fit their strategy, risk appetite, or customer base. Declining to participate is a legitimate choice, but it should be a deliberate decision rather than a default.

Even banks that do not participate directly should consider potential deposit outflows, customer demand for stablecoin payment and treasury services, exposure through customers, correspondents, and vendors, BSA/AML and sanctions monitoring of stablecoin transactions, and periodic reassessment as other agencies finalize their rules.

Deposit Competition and Strategic Considerations

While the GENIUS Act’s yield prohibition remains in place, the OCC’s removal of the proposed presumption against affiliate and third-party incentives may allow market participants to develop rewards programs that function similarly to traditional deposit incentives.

Banks should therefore consider whether stablecoin ecosystems could compete with transaction accounts, treasury and cash management products, money market products, and certain payment services.

Tokenized deposits remain outside the scope of Part 15 and are not subject to the statute’s yield prohibition, creating strategic opportunities that some institutions may choose to explore.

OCC Bulletin 2026-51: Waivers and Application Procedures

Waivers

Beginning January 18, 2027, an entity generally must be approved as a PPSI before issuing payment stablecoins.

Under GENIUS Act § 5(f), the OCC may grant a temporary waiver of the prior-approval requirement for up to twelve months where a qualifying applicant has submitted a pending application.

Key points include:

• Existing U.S. issuers generally are expected to receive favorable consideration.
• Waiver requests must accompany a substantially complete application.
• New market entrants generally should not expect waivers.
• The OCC intends to act on waiver requests as promptly as practicable before January 18, 2027.

Application Process

Applications will be submitted through the OCC’s GENIUS Act portal once OMB approval is obtained.

Applications must address the business plan, management and governance, reserves, issuance and redemption, capital and liquidity, risk management, BSA/AML/OFAC compliance, third-party risk management, and audit programs.

The OCC expects to:

• Notify applicants within 30 days whether submissions are substantially complete;
• Return incomplete applications after 60 days; and
• Issue decisions within 120 days after determining that an application is substantially complete.

OCC Bulletin 2026-52: Revised Reporting Forms and Instructions

The OCC also revised issuer reporting forms and instructions. The new reports include:

• PS-01: Payment Stablecoin Activity and Reserve Weekly Reporting, expected to begin January 25, 2027 (subject to OMB approval).
• PS-02: Reports of Condition and Income (quarterly), expected to begin March 31, 2027 (subject to OMB approval).

These reports are intended to support ongoing supervision, monitor issuer compliance, and provide transparency regarding financial condition and reserve management.

Interagency Outlook

The OCC’s final rule is likely to serve as a reference point for other GENIUS Act rulemakings by Treasury, FinCEN, OFAC, the Federal Reserve, the FDIC, and the NCUA. Although Congress established a uniform federal framework, differences may emerge across agencies on supervision, liquidity, sanctions compliance, and AML obligations.

What You Should Do Now

Before January 18, 2027, banks and other market participants should:

• Determine whether, and if so, how, to participate as an issuer, reserve depository, custodian, technology provider, or service provider.
• Assess the competitive impact of stablecoins on deposits, payments, and treasury management offerings.
• Review governance structures and board oversight processes.
• Evaluate liquidity management and contingency funding plans.
• Develop reserve monitoring and stress-testing capabilities.
• Review custody agreements, key-control procedures, and sub-custodian oversight frameworks.
• Build systems to support weekly and quarterly reporting obligations.
• Prepare application materials and waiver requests, if applicable.
• Monitor additional rulemakings from Treasury, FinCEN, OFAC, the Federal Reserve, the FDIC, and the NCUA.
• Above all, and regardless of the decision with respect to participation in the stablecoin marketplace, stay educated on GENIUS Act developments and institute mandatory training on stablecoins and the GENIUS Act for customer-facing employees.

Bottom Line

The OCC’s final rule marks the beginning of the operational phase of stablecoin regulation in the United States. Although stablecoin issuance will remain highly regulated, the rule creates meaningful opportunities for banks to participate in the emerging digital payments ecosystem as issuers, reserve depositories, custodians, infrastructure providers, and strategic partners. Institutions that evaluate those opportunities now, while building the governance, liquidity, compliance, and operational capabilities needed for success, will be best positioned as the GENIUS Act framework takes effect in January 2027.

Winthrop & Weinstine provides GENIUS Act readiness planning for clients, including, but not limited, reviewing and updating existing policies and procedures and assessing compliance with the GENIUS Act and the OCC’s final rule, strategic reviews, and issuer, custodian, and depository compliance services.

For questions about the OCC final rule, the GENIUS Act, Winthrop’s readiness planning services, or how these developments may affect your institution, please contact Kristen Larson or Vince Pecora.