Four federal agencies are simultaneously drafting rules to operationalize the GENIUS Act, signed into law on July 18, 2025. The Office of the Comptroller of the Currency published its proposed rule on February 25, creating a new 12 CFR Part 15 with comment period closing May 1. The Treasury Depar...
"We recognize that payment stablecoin issuers are not necessarily — and shouldn't always be treated — as banks. That being said, because we regulate a number of entities, including bank entities engaged in payment stablecoin activity, we want to ensure that the supervisory approach to the activity is going to be treated similarly, regardless of who's doing it." — Jonathan Gould, Comptroller of the Currency
Four federal agencies are simultaneously drafting rules to operationalize the GENIUS Act, signed into law on July 18, 2025. The Office of the Comptroller of the Currency published its proposed rule on February 25, creating a new 12 CFR Part 15 with comment period closing May 1. The Treasury Department followed on April 1 with a separate notice of proposed rulemaking establishing criteria for state regulatory equivalence. The FDIC extended its own comment period to May 18. The NCUA published a parallel licensing framework for credit union subsidiaries in March.
All four rulemakings must reach final form by July 18, 2026 — 12 months after the Act's enactment — or the GENIUS Act takes effect automatically on January 18, 2027, whichever deadline arrives first. The stablecoin market these rules will govern stands at approximately $311 billion, with Tether controlling 60.7% market share at $184 billion and USDC at $77.3 billion. Eleven companies have filed for or received OCC national trust bank charter approvals in the 83 days since applications opened.
The regulatory architecture emerging from these parallel rulemakings will determine whether the U.S. stablecoin market consolidates around federally chartered institutions or fragments across 50 state regimes.
The GENIUS Act assigned rulemaking responsibilities to four separate federal bodies, each governing a different category of stablecoin issuer. The statutory deadline structure is binary: regulators finalize rules by July 18, 2026, or the Act's provisions take effect unmediated on January 18, 2027.
| Agency | Scope | NPRM Published | Comment Deadline | |--------|-------|----------------|-----------------| | OCC | National banks, federal savings associations, nonbank FQPSIs, foreign issuers | Feb. 25, 2026 | May 1, 2026 | | Treasury | State regulatory equivalence determination | Apr. 1, 2026 | 60 days post-Federal Register | | FDIC | Subsidiaries of FDIC-supervised insured depository institutions | Dec. 19, 2025 | May 18, 2026 (extended) | | NCUA | Subsidiaries of federally insured credit unions | Mar. 2026 | Pending |
The OCC's proposal is the most detailed, spanning a new regulatory part (12 CFR 15) and amendments to four existing parts (12 CFR 3, 6, 8, and 19). It contains over 200 specific questions seeking public comment. Treasury's April 1 filing is narrower, focused exclusively on what constitutes "substantial similarity" between state and federal frameworks.
The OCC's proposed rule creates three pathways for entities seeking to issue payment stablecoins under federal supervision:
The application process follows bank-like procedures. The OCC has 30 days to determine application completeness and 120 days thereafter to render a decision. If no decision is issued within the 120-day window, the application is deemed approved — an unusual provision designed to prevent regulatory delay from functioning as de facto denial.
For foreign payment stablecoin issuers (FPSIs), registration is deemed approved on the 30th day unless the OCC issues a written rejection. Foreign issuers must consent to U.S. jurisdiction, maintain U.S.-accessible reserves, and file monthly reports detailing outstanding stablecoins held by U.S. customers.
Treasury's April 1 NPRM addresses a structural question at the center of the GENIUS Act's federalist design: which state regulatory regimes qualify as "substantially similar" to federal standards, thereby allowing issuers under $10 billion in outstanding stablecoins to operate under state rather than federal oversight.
The proposed rule defines "federal regulatory framework" broadly, encompassing not just the statutory text but the full body of implementing regulations issued by federal agencies. This interpretation was contested during the September 2025 advance notice of proposed rulemaking, which drew 333 public comments. State regulators argued for parity with federal agencies; industry participants pushed for maximum state flexibility.
The result is a framework that grants states "wide latitude" to design their own regimes using legislation, regulation, and enforceable guidance as they see fit, subject to three non-negotiable requirements:
State regulators must submit initial certification to the Stablecoin Certification Review Committee (SCRC) by July 18, 2026. States that fail to certify by this date risk losing their regulated issuers to the federal pathway.
The FDIC's proposal, first published December 19, 2025, covers subsidiaries of FDIC-supervised insured depository institutions — primarily state nonmember banks and state savings associations. The agency extended its comment period from February 17 to May 18, 2026, signaling the complexity of aligning its framework with the OCC's more detailed proposal.
The FDIC process mirrors the OCC's: letter applications, 30-day completeness reviews, 120-day decision windows, and denial only where activities would be "unsafe or unsound." Required application materials include engagement letters with registered public accounting firms, governance documentation, and detailed descriptions of proposed stablecoin activities.
The NCUA published its own licensing framework in March 2026 for credit union subsidiaries seeking to issue payment stablecoins. While credit unions represent a smaller share of the stablecoin market's potential issuers, their inclusion reflects the GENIUS Act's intent to create a comprehensive regulatory perimeter.
The OCC's proposed capital and reserve requirements represent the most prescriptive elements of the rulemaking package.
Reserve requirements mandate 1:1 backing on a par value basis. Permitted reserve assets include U.S. currency, demand deposits at insured depository institutions, Treasury bills with maximum 93-day maturity, reverse repurchase agreements, and government money market funds. Stablecoins and other crypto-assets are explicitly prohibited as reserve assets.
The liquidity structure offers two options, with Option A specifying:
Large issuers with $25 billion or more in outstanding stablecoins face additional requirements: a minimum 0.5% in insured deposits, capped at $500 million.
Capital requirements are limited to Common Equity Tier 1 and Additional Tier 1 — no Tier 2 capital permitted. The absolute minimum floor is $5 million. During a three-year de novo period, the OCC sets individualized capital minimums. The proposal requires issuers to include Accumulated Other Comprehensive Income (AOCI) in CET1 capital, a provision that directly links mark-to-market fluctuations in reserve asset values to regulatory capital adequacy.
An operational backstop requirement mandates 12 months of total operating expenses held in highly liquid assets, separate from token reserves.
Eleven companies filed for or received OCC national trust bank charter approvals within 83 days of applications opening. The roster includes Circle, Ripple, BitGo, Paxos, Fidelity Digital Assets, Bridge (acquired by Stripe in 2024), Crypto.com, Protego, Morgan Stanley, and Payoneer. Coinbase received conditional approval on April 2, 2026.
Conditional approval is not final authorization. Entities must complete a pre-opening phase demonstrating robust AML systems, capital adequacy, and execution of formal operating agreements with the OCC. The conditional approval grants Coinbase access to a national trust bank structure that permits digital asset custody across all 50 states under a single regulatory framework, though it does not authorize deposit-taking or lending.
The charter applications reveal a market dividing into two tiers: established financial institutions (Morgan Stanley, Fidelity) treating stablecoins as an extension of existing custody and settlement infrastructure, and crypto-native firms (Circle, Coinbase, Paxos) seeking federal legitimacy to reduce state-by-state licensing costs.
Internationally, Hong Kong's HKMA received 36 applications under the Stablecoins Ordinance (effective August 2025) but signaled it would approve only three or four in the initial batch.
The OCC's proposal contains explicit prohibitions that constrain business models currently prevalent in stablecoin markets:
Yield prohibition: Payment stablecoin issuers cannot pay interest or yield to stablecoin holders. The proposal creates a rebuttable presumption against affiliate arrangements that effectively provide yield to holders. The OCC posed questions seeking comment on potential de minimis exceptions.
Reserve asset restrictions: Reserves cannot be pledged, rehypothecated, or reused except in limited circumstances. This eliminates a revenue model where issuers deploy reserves into higher-yielding instruments beyond permitted categories.
Redemption constraints: Issuers must process redemptions within 2 business days under normal conditions, extendable to 7 calendar days only when redemption requests exceed 10% of outstanding issuance within 24 hours. Any change to redemption fees requires 7 calendar days' advance notice.
Enforcement triggers: If capital or backstop requirements are unmet for one quarter, the issuer faces a net new issuance prohibition. Two consecutive quarters of non-compliance trigger mandatory redemption and wind-down. A reserve shortfall below 1:1 parity immediately halts new issuance; if the shortfall persists for 15 consecutive business days, liquidation proceedings begin.
The regulatory architecture under construction favors institutions with existing compliance infrastructure. The capital floor of $5 million is manageable for established firms but non-trivial for startups. The 12-month operational backstop requirement represents a significant upfront cost barrier. Weekly confidential reports to the OCC and monthly public reserve reports — audited by public accounting firms and certified by CEO and CFO — impose ongoing compliance costs that scale with organizational complexity rather than issuance volume.
The yield prohibition directly impacts the CLARITY Act negotiations, where the question of whether stablecoins can offer interest to holders remains a point of contention between the White House, banks, and crypto companies. Prediction markets placed the odds of the CLARITY Act passing at 64-65% following comments from Coinbase CLO Paul Grewal that a deal is "very close."
The state equivalence framework creates a regulatory arbitrage channel. States offering more favorable capital treatment — while meeting Treasury's uniform standards on reserves and AML — could attract sub-$10 billion issuers away from the federal pathway. Wyoming, which launched its Frontier Stable Token (FRNT) backed by U.S. dollars and short-term Treasuries in August 2025, and New York, whose BitLicense predates the GENIUS Act, are positioned as early contenders for equivalence certification.
The 120-day deemed-approval provision for OCC applications and the 30-day deemed-approval for foreign issuers represent a deliberate policy choice to prevent regulatory inaction from blocking market entry — a lesson drawn from the OCC's prior experience with fintech charter applications that languished without resolution.
The GENIUS Act's implementing regulations represent the most detailed federal framework ever proposed for a crypto-asset class. The four-agency rulemaking process is complex, overlapping, and operating under a hard statutory deadline. Whether regulators finalize in time will determine whether the U.S. stablecoin market operates under a coherent federal-state framework or defaults to the Act's unmediated statutory provisions.
The market structure that emerges will likely bifurcate: large issuers (above $10 billion) operating under direct federal oversight, and smaller issuers selecting from state regimes certified as "substantially similar" by Treasury. The prohibition on yield payments, combined with strict reserve composition rules, constrains issuer profitability to the spread between reserve asset returns and operating costs — a margin that tightens as Treasury bill yields compress.
For the $311 billion stablecoin market, the regulatory apparatus now under construction will determine the cost of doing business, the barriers to entry, and ultimately which institutions control the infrastructure of dollar-denominated digital payments.