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

Federal RegisterMar 2, 2026

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3, 6, 8, 15, and 19

[Docket ID OCC-2025-0372]

RIN 1557-AF41

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

AGENCY:

Office of the Comptroller of the Currency, Treasury.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Office of the Comptroller of the Currency (OCC) proposes to issue regulations to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act regarding the issuance of payment stablecoins and certain related activities by entities subject to the OCC's jurisdiction.

DATES:

Comments must be received by May 1, 2026.

ADDRESSES:

Commenters are encouraged to submit comments through the Federal eRulemaking Portal. Please use the title “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” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:

•

Federal eRulemaking Portal—Regulations.gov:

Go to

https://regulations.gov/.

Enter Docket ID “OCC-2025-0372” in the Search Box and click “Search.” Public comments can be submitted via the “Comment” box below the displayed document information or by clicking on the document title and then clicking the “Comment” box on the top-left side of the screen. For help with submitting effective comments please click on “Commenter's Checklist.” For assistance with the

Regulations.gov

site, please call 1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. ET, or email

regulationshelpdesk@gsa.gov.

•

Mail:

Chief Counsel's Office, Attention: Comment Processing, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 1E-216, Washington, DC 20219.

•

Hand Delivery/Courier:

400 7th Street SW, Suite 1E-216, Washington, DC 20219.

Instructions:

You must include “OCC” as the agency name and Docket ID “OCC-2025-0372” in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the

Regulations.gov

website without change, including any business or personal information provided such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.

You may review comments and other related materials that pertain to this action by the following method:

•

Viewing Comments Electronically—Regulations.gov:

Go to

https://regulations.gov/.

Enter Docket ID “OCC-2025-0372” in the Search Box and click “Search.” Click on the “Documents” tab and then the document's title. After clicking the document's title, click the “Document Comments” tab. Comments can be viewed and filtered by clicking on the “Sort By” drop-down on the right side of the screen or the “Refine Results” options on the left side of the screen. Supporting materials can be viewed by clicking on the “Documents” tab. Click on the “Sort By” drop-down on the right side of the screen or the “Refine Documents Results” options on the left side of the screen checking the “Supporting & Related Material” checkbox. For assistance with the

Regulations.gov

site, please call 1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. ET, or email

regulationshelpdesk@gsa.gov.

The docket may be viewed after the close of the comment period in the same manner as during the comment period.

FOR FURTHER INFORMATION CONTACT:

Sarah Turney, Assistant Director, Henry Barkhausen, Counsel, Daniel Borman, Counsel, Marjorie Dieter, Counsel, or Mark O'Horo, Special Counsel, Chief Counsel's Office, 202-649-5490, or David Stankiewicz, Director, Office of Financial Technology, Office of the Chief National Bank Examiner, 202-649-5473, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.

SUPPLEMENTARY INFORMATION:

I. Background

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (12 U.S.C. 5901

et seq.

) (GENIUS Act or the Act) was enacted on July 18, 2025. The Act establishes a regulatory framework for payment stablecoin activities. Stablecoins are digital assets,

i.e.,

digital representations of value recorded on a cryptographically secured distributed ledger,

such as a blockchain.

In contrast to many other types of digital assets, stablecoins are intended to maintain a stable value relative to a reference asset, most often fiat currency.

Most stablecoin issuers use a pool of high quality and highly liquid reserve assets to back the stablecoin and maintain a stable value.

Stablecoins often rely on smart contracts (

i.e.,

self-executing programs that automatically enforce agreements between users) for different aspects of their functionality.

When an issuer redeems a tendered stablecoin, it typically accepts a stablecoin from a user or third party in exchange for a fixed amount of monetary value,

e.g.,

one dollar.

Stablecoins are frequently used to facilitate trading in digital assets and may be used for retail and institutional payments.

Certain stablecoin issuers have the capability to freeze funds or block transactions involving their stablecoin, which they may do, for example, to effectuate a court order.

12 U.S.C. 5901(6).

White House, “Strengthening American Leadership in Digital Financial Technology,” at 15 (July 17, 2025), [hereinafter, Digital Financial Technology Report],

https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf.

A cryptographically secured ledger uses cryptography to maintain the integrity of the ledger.

see also

12 CFR 7.4000(a)(2) (describing the OCC's visitorial powers with respect to national banks).

Twelve U.S.C. 484 would also continue to apply to uninsured national banks and Federal branches that become permitted payment stablecoin issuers.

Section 5(h) of the GENIUS Act (12 U.S.C. 5904(h)) expressly preempts “any State requirement for a charter, license, or other authorization to do business with respect to a” Federal qualified payment stablecoin issuer or a subsidiary of an OCC-regulated insured depository institution approved to be a permitted payment stablecoin issuer. As a result, these entities are only required to obtain authorization to do business from the OCC, which reduces the unnecessary complexity that would result from requiring these entities to also obtain a charter, license, or other authorization from one or more States. Section 7(f)(4) of the GENIUS Act (12 U.S.C. 5906(f)(4)) provides that nothing in the GENIUS Act preempts State consumer protection laws.

Depending on the circumstances, other Federal law, such as the National Bank Act and the Home Owners' Loan Act, may also be relevant in assessing the applicability of State law, including a State consumer protection law, to certain permitted payment stablecoin issuers, such as uninsured national banks.

Together, these GENIUS Act provisions establish a framework for assessing the applicability of State law to a Federal qualified payment stablecoin issuer or a subsidiary of an OCC-regulated insured depository institution approved to be permitted payment stablecoin issuer.

Because these GENIUS Act provisions are self-executing, the OCC is not proposing regulatory text to implement them. However, the agency invites public comment on all aspects of this framework, including whether the self-executing provisions of the Act should be codified in the OCC's regulations for convenience.

The GENIUS Act also addresses the applicability of State law to State qualified payment stablecoin issuers.

See, e.g.,

section 7(f) of the Act (12 U.S.C. 5906(f)).

Among other self-executing provisions, section 4(g) of the GENIUS Act (12 U.S.C. 5903(g)) provides that a Federal savings association established under the Home Owners' Loan Act (12 U.S.C. 1461

et seq.

) that holds a reserve that satisfies the requirements of section 4(a)(1) of the GENIUS Act shall not be required to satisfy the qualified thrift lender test under section 10(m) of the Home Owners' Loan Act (12 U.S.C. 1467a(m))

with respect to such reserve assets. Because this provision is self-executing, the OCC is not proposing regulatory text to implement section 4(g).

A Federal savings association is generally required to be qualified thrift lender. A Federal savings association is a qualified thrift lender if it meets one of the following qualified thrift lender tests: (1) it qualifies as a domestic building and loan association as defined in 26 U.S.C. 7701(a)(19); or (2) its qualified thrift investments equal or exceed 65 percent of its portfolio assets, and its qualified thrift investments continue to equal or exceed 65 percent of its portfolio assets on a monthly average basis in nine out of every 12 months.

II. Description of the Proposed Rule

A. Subpart A—Purpose, Scope, Definitions, and Severability

Subpart A of the proposed rules provides the purpose and scope and defines terms used throughout the proposed rule.

1. Purpose and Scope (Proposed § 15.1)

Proposed § 15.1 sets forth the purpose and scope of the stablecoin-related regulations. Paragraph (a) describes the purpose, which is to implement the GENIUS Act, 12 U.S.C. 5901

et seq.,

with respect to entities for which the OCC is authorized to issue regulations or exercise its enforcement authority under the Act. These entities are listed in the proposed scope provision in paragraph (b), which provides that proposed part 15 would apply to activities related to payment stablecoins and certain custody activities of (1) national banks and their subsidiaries; (2) Federal savings associations and their subsidiaries; (3) Federal branches and their subsidiaries; (4) Foreign payment stablecoin issuers; (5) nonbank entities that seek to be or are approved as Federal qualified payment stablecoin issuers; and (6) State qualified payment stablecoin issuers for whom the OCC has regulatory or enforcement authority pursuant to proposed § 15.15 or § 15.16. Thus, except where otherwise noted, references in part 15 to permitted payment stablecoin issuers would only apply to these types of listed entities despite the broader scope of the term in the GENIUS Act.

As described in the section-by-section analysis below, proposed subparts B and E would apply to permitted payment stablecoin issuers that are subsidiaries of insured national banks, subsidiaries of Federal savings associations, uninsured national banks, Federal branches or subsidiaries thereof, nonbank entities that are not State qualified payment stablecoin issuers, and State qualified payment stablecoin issuers for whom the OCC has regulatory or enforcement authority. Proposed subpart C would apply to national banks, Federal savings associations, Federal branches, Federal qualified payment stablecoin issuers, and State qualified payment stablecoin issuers with an outstanding issuance of more than $10 billion subject to supervision and regulation by the OCC who provide custodial or safekeeping services for payment stablecoins, reserve assets, and other “covered assets” (described in detail in subpart C). The application and registration sections in proposed subpart D would apply to insured national banks, Federal savings associations, or Federal branches that seek to issue payment stablecoins through a subsidiary; nonbank entities that seek to be Federal qualified payment stablecoin issuers, uninsured national banks, and uninsured Federal branches that seek to be Federal qualified payment stablecoin issuers; and entities that seek to register as foreign payment stablecoin issuers. The capital requirements detailed in proposed subpart E would apply to subsidiaries of insured national banks, subsidiaries of Federal savings associations, uninsured national banks, Federal branches or subsidiaries thereof, nonbank entities that are not State qualified payment stablecoin issuers, and State qualified payment stablecoin issuers for whom the OCC has regulatory authority.

2. Definitions (Proposed § 15.2)

Proposed section 15.2 contains the following definitions of terms used throughout proposed part 15, many of which are included in or based on the definitions in the GENIUS Act, 12 U.S.C. 5901.

The definitions in proposed § 15.2 describe only terms used in proposed part 15. These definitions do not interpret terms for purposes of any other statute or regulation and are not issued pursuant to section 3(d) of the GENIUS Act (12 U.S.C. 5902(d)).

Affiliate.

The OCC is proposing to define the term “affiliate” consistent with the definition in the Bank Holding Company Act, 12 U.S.C. 1841(k), but modified to use the defined term “person” in place of the term “company.”

Under the proposed rule, the term “affiliate” would mean a person that controls, is controlled by, or is under common control with another person. The OCC believes the proposed definition of affiliate would include the appropriate individuals and entities that could be involved in payment stablecoin issuance.

While the proposed definition of “affiliate” is consistent with the definition in the Bank Holding Company Act, the OCC would retain interpretive authority with respect to this definition for purposes of proposed 12 CFR part 15. The OCC generally expects that it would interpret questions regarding the definition of “affiliate” consistent with the provisions of 12 CFR part 225 as of the date of this issuance.

Bank Secrecy Act.

The OCC is proposing to define the term “Bank Secrecy Act” consistent with the definition provided in the GENIUS Act, 12 U.S.C. 5901(2). Under the proposal,

the term “Bank Secrecy Act” would mean: (1) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b); (2) chapter 2 of title I of Public Law 91-508 (12 U.S.C. 1951

et seq.

); and (3) subchapter II of chapter 53 of title 31, United States Code and notes thereto (31 U.S.C. 5311

et seq.

). The proposal would add the phrase “and notes thereto” as a clarification.

Board of directors.

Under the proposed rule, “board of directors” would mean a payment stablecoin issuer's or applicant's board of directors or the group of individuals that serve the nearest equivalent function of acting as the governing body of the issuer or applicant. The proposed definition captures the persons responsible for certain requirements under proposed part 15, including for permitted payment stablecoin issuers that do not have a board of directors as that term is commonly understood.

Control.

The OCC is defining “control” such that a person would control another person if: (1) the person directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 percent or more of any class of voting securities of the other person; (2) the person controls in any manner the election of a majority of the directors or trustees of the other person; or (3) the OCC determines, after notice and opportunity for hearing, that the person directly or indirectly exercises a controlling influence over the management or policies of the other person. Like the definition of “affiliate,” the proposed definition of “control” is generally consistent with the Bank Holding Company Act.

The OCC notes that proposed § 15.14 would include certain provisions regarding changes in control that would refer to the use of that term under 12 CFR 5.50, rather than under the Bank Holding Company Act. Thus, for purposes of those provisions, permitted payment stablecoin issuers should refer to 12 CFR 5.50.

While the proposed definition of control is consistent with the definition in the Bank Holding Company Act, the OCC would retain interpretive authority with respect to this definition for purposes of proposed 12 CFR part 15. The OCC generally expects that it would interpret questions regarding the definition of “control” consistent with the provisions of 12 CFR part 225, including those relating to the presumption of control, as of the date of this issuance.

Customer.

The OCC is proposing to define the term “customer” to mean a person that purchases (through any consideration) the products or services of another person. This term appears in a variety of different contexts in the proposed rule, so the OCC has proposed a broad definition for the term. The definition for purposes of the proposed rule is not intended to affect any customer identification program or customer due diligence rules.

Deposit.

The OCC is proposing to define the term “deposit” to have the same meaning as deposit in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)).

Depository institution.

The OCC is proposing to define the term “depository institution” to mean a depository institution as that term is defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(1)) or a credit union. The OCC is proposing this definition to improve clarity because, although the GENIUS Act uses the term “depository institution,” it is not defined in section 2 of the Act (12 U.S.C. 5901). Section 11(g) of the Act (12 U.S.C. 5911) does, however, refer to the Federal Deposit Insurance Act's definition.

The OCC believes that incorporating this definition will promote clarity and consistency. Under the Federal Deposit Insurance Act, the term “depository institution” means any bank or savings association, which are both defined terms under that statute, and would be incorporated herein to determine whether an institution is a depository institution for purposes of proposed part 15. The OCC is proposing to include a reference to credit unions consistent with the approach that the GENIUS Act took with respect to the definition of “insured depository institution,” defined below, and which explicitly includes insured credit unions. This term is particularly relevant with respect to the OCC's jurisdiction over certain nonbank entities under sections 2(25), 4(d), and 7(e) of the Act (12 U.S.C. 5901(25), 5903(d), and 5906(e)).

The proposed definition of “depository institution” for purposes of part 15 would not affect the meaning of the term under section 11(g) of the GENIUS Act (12 U.S.C. 5911).

Digital asset.

The OCC is proposing to define the term “digital asset” as provided in section 2(6) of the GENIUS Act (12 U.S.C. 5901(6)). Under the proposed rule, the term “digital asset” would mean any digital representation of value that is recorded on a cryptographically secured distributed ledger.

Director.

The OCC is proposing to define the term “director” for purposes of this proposed part to mean an individual who serves on the board of directors of a permitted payment stablecoin issuer or applicant, except an advisory director who does not have the authority to vote on matters before the board of directors or any committee of the board of directors and provides solely general policy advice to the board of directors or any committee. The OCC based the proposed definition on the definition included in 12 CFR 5.51. The proposed definition has been modified from that in 12 CFR 5.51 to remove the exclusion for a director of a foreign bank that operates a Federal branch. The OCC determined that this language is unnecessary in light of the proposed definition of the term “board of directors.” As described above, to address the various organizational forms used by permitted payment stablecoin issuers and applicants, including those that do not have a traditional board of directors, the OCC is proposing to define the term “board of directors” in this proposed part to include a group of individuals that serve the nearest equivalent function of acting as the governing body of the issuer or applicant. For a Federal branch, individuals who would meet the proposed definition of “director” would include individuals that are part of that group. Further, the directors of Federal branches would not include individuals who serve on the board of directors of the foreign bank but who do not serve in the equivalent capacity with respect to the Federal branch.

Distributed ledger.

The OCC is proposing to define the term “distributed ledger” as provided in the GENIUS Act, 12 U.S.C. 5901(8), with certain technical edits. The proposed rule would define the term “distributed ledger” to mean technology in which (1) data is shared across a network that creates a public digital ledger of verified transactions or information among network participants and (2) cryptography is used to link the data to maintain the integrity of the public ledger and execute other functions. The proposed definition reformats the definition in the GENIUS Act by using numbering to distinguish between the two components of the definition. The formatting changes are technical and do not have a substantive effect on the definition.

Distributed ledger protocol.

The OCC is proposing to define the term “distributed ledger protocol” as provided in the GENIUS Act, 12 U.S.C. 5901(9). The term “distributed ledger protocol” would mean publicly available and accessible executable software deployed to a distributed ledger, including smart contracts or networks of smart contracts.

Eligible financial institution.

The OCC is proposing to define “eligible financial institution” to mean (1) a person that (a) is eligible to hold reserve assets in custody under section 10(a) of the

GENIUS Act (12 U.S.C. 5909(a)); (b) complies with the applicable requirements in section 10(b), (c), and (d) of the GENIUS Act (12 U.S.C. 5909(b), (c) and (d)), including with applicable implementing regulations issued by a relevant Federal payment stablecoin regulator as defined in 12 U.S.C. 5901(25), primary financial regulatory agency described in 12 U.S.C. 5301(12)(B) or (C), State bank supervisor, or State credit union supervisor; and (c), if applicable, enters into a custody agreement with a permitted payment stablecoin issuer documenting the person's compliance with section 10(b), (c) and (d) of the Act as well as policies and procedures to ensure compliance; or (2) a Federal Reserve Bank.

The term “eligible financial institution” is relevant to the reserve asset diversification and concentration requirements in proposed § 15.11(c) of the proposed rule. Under section 10(a) of the GENIUS Act, a person may only engage in the business of providing custodial or safekeeping services for the payment stablecoin reserve, the payment stablecoins used as collateral, or the private keys used to issue payment stablecoins if the person (1) is subject to (A) supervision or regulation by a primary Federal payment stablecoin regulator or a primary financial regulatory agency described under subparagraph (B) or (C) of section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301(12)); or (B) supervision by a State bank supervisor, as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), or a State credit union supervisor, as defined under section 6003 of the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311 note), and such State bank supervisor or State credit union supervisor makes available to the Federal Reserve such information as the Federal Reserve determines necessary and relevant to the categories of information under section 10(d) of the Act; and (2) complies with the requirements under section 10(b), unless such person holds such property in accordance with similar requirements as required by a primary Federal payment stablecoin regulator, the Securities and Exchange Commission, or the Commodity Futures Trading Commission.

Eligible financial institutions would include insured depository institutions and national banks regardless of whether the entities engaged in stablecoin activities or provided custody services to permitted payment stablecoin issuers because these entities are subject to supervision or regulation by a primary Federal payment stablecoin regulator. Thus, for example, under proposed § 15.11(c) a permitted payment stablecoin issuer could hold reserves as deposits at a national bank regardless of whether the national bank acted as custodian for the permitted payment stablecoin issuer's other reserve assets.

To meet the proposed definition, a financial institution must also comply with the applicable requirements of section 10 of the Act (12 U.S.C. 5909), and the relevant custody agreement must reflect compliance with section 10 as well as policies and procedures to ensure such compliance.

These criteria are intended to ensure compliance with section 10 of the Act and to encourage appropriate due diligence of entities that hold reserve assets for permitted payment stablecoin issuers.

As discussed above, to the extent that an eligible financial institution does not engage in custody of covered assets, section 10 of the GENIUS Act (12 U.S.C. 5909) would not apply.

The OCC recognizes that multiple agencies will regulate stablecoin issuers and that multiple agencies regulate the entities that may permissibly custody reserve assets. The proposed rule would impose requirements on where and how OCC-regulated permitted payment stablecoin issuers may hold reserve assets and would also impose requirements on OCC-regulated institutions that hold reserve assets on behalf of stablecoin issuers, including stablecoin issuers not regulated by the OCC. Accordingly, there may be overlap between the requirements imposed by different regulators with separate requirements implementing section 10 of the GENIUS Act that govern how their regulated entities must handle reserve assets placed by other stablecoin issuers. The OCC invites comment on the best ways to manage potentially overlapping requirements. The proposed rule would require that an “eligible financial institution” comply with the requirements in section 10(b), (c), and (d) of the GENIUS Act, including applicable implementing regulations. Accordingly, even if different types of eligible financial institutions are subject to different regulations on the safe handling of stablecoin reserve assets, an OCC-regulated permitted payment stablecoin issuer could still custody reserve assets at any entity that meets the requirements in the definition of “eligible financial institution.” Given the diverse set of entities that may permissibly hold stablecoin reserves, the proposed definition of “eligible financial institution” would not necessarily require that eligible financial institutions be subject to uniform regulations implementing the requirements in section 10(b), (c), and (d) of the GENIUS Act. The proposed rule would require a permitted payment stablecoin issuer to enter into a custody agreement with an eligible financial institution, which would establish a baseline that the eligible financial institution is adhering to the requirements in section 10(b), (c), and (d), along with any implementing regulations. In the absence of this requirement, reserve assets might be placed at a financial institution without the financial institution even purporting to comply with the requirements in section 10(b), (c), or (d), or possibly even knowing that its customer's assets represent stablecoin reserves.

Executive officer.

The OCC is proposing a definition for the term “executive officer,” which is used in connection with the proposed application process in § 15.30. Under the proposal, the term “executive officer” would mean the president, chairman, chief executive officer, chief operating officer, chief financial officer, chief investment officer, chief risk officer, chief technology officer, and Bank Secrecy Act officer. The term would include any individual serving in the functional capacity of the listed titles or their equivalent, without regard to title, salary, or compensation. The OCC based the proposed “executive officer” definition on the definition of “Senior executive officer” in 12 CFR 5.51(c)(4) with certain modifications to conform the language and format to apply to the relevant individuals and entities under this proposed part and to streamline the definition to the positions most likely to be relevant for permitted payment stablecoin issuers.

Fair value.

The OCC is proposing to include a definition of the term “fair value” in the rule. As proposed, the term “fair value” would mean the fair value as determined under GAAP.

Fair value is used in proposed § 15.11 in describing proposed reserve requirements.

See

discussion of the definition of “GAAP,”

infra.

FDIC.

The OCC is proposing to define FDIC to mean the Federal Deposit Insurance Corporation. This accords with the definition of “Corporation” in section 2(5) of the GENIUS Act (12 U.S.C. 5901(5)). The OCC has opted not to use the term “Corporation” to describe the FDIC because that term is used more broadly in the definition of person, discussed below.

Federal branch.

The OCC is proposing to define the term “Federal branch” as provided in the GENIUS Act, 12 U.S.C. 5901(10). Specifically, the proposed rule provides that the term “Federal branch” would have the meaning set forth in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(s)(2)).

Federal qualified payment stablecoin issuer.

The OCC is proposing to define the term “Federal qualified payment stablecoin issuer” consistent with the definition of that term in the GENIUS Act, 12 U.S.C. 5901(11), with certain technical and conforming changes. Specifically, the proposed rule would define the term “Federal qualified payment stablecoin issuer” to mean the following entities that are approved by the OCC, pursuant to proposed § 15.30, to issue payment stablecoins: (1) a nonbank entity, other than a State qualified payment stablecoin issuer; (2) an uninsured national bank that is chartered by the OCC, pursuant to title LXII of the Revised Statutes; or (3) a Federal branch.

The proposed definition modifies the definition provided in the GENIUS Act by reformatting it to reduce repetition and replacing the statutory term “Comptroller” with the proposed defined term “OCC.” In addition, the proposed definition replaces cross references to section 5 of the GENIUS Act (12 U.S.C. 5904) with a cross reference to the proposed implementing provisions in proposed § 15.30.

Certain Federal qualified payment stablecoin issuers may be subsidiaries of national banks. For example, an uninsured national trust bank may be a subsidiary of a national bank. An insured national bank or Federal savings association seeking to issue a payment stablecoin would, however, need to do so through a subsidiary, as required under the GENIUS Act.

See

12 U.S.C. 5901(23) (defining “permitted payment stablecoin issuer”).

Federal Reserve.

The proposed rule would define the term “Federal Reserve” to mean the Board of Governors of the Federal Reserve System. This accords with the definition of “Board” in section 2(3) of the GENIUS Act (12 U.S.C. 5901(3)). The OCC proposes to use the term “Federal Reserve” in place of “Board” for greater clarity because the proposed rule refers separately to boards of directors in various sections.

Foreign payment stablecoin issuer.

The OCC is proposing to define the term “foreign payment stablecoin issuer” consistent with the definition of that term in the GENIUS Act, 12 U.S.C. 5901(12), with certain clarifying changes. Under the proposed rule, the term “foreign payment stablecoin issuer” would mean an issuer of a payment stablecoin that is (1) organized under the laws of or domiciled in a foreign country or a territory of the United States; and (2) not a permitted payment stablecoin issuer as defined in 12 U.S.C. 5901(23). The proposed definition of foreign payment stablecoin issuer would refer to the statutory definition of “permitted payment stablecoin issuer” because the proposed rule generally limits the definition of that term to entities subject to the OCC's jurisdiction.

Although included in the statutory definition, the proposed definition does not include the phrase “Puerto Rico, Guam, American Samoa, or the Virgin Islands.” The OCC determined that the omitted phrase was redundant and may lead to confusion. Under the proposed definition, a foreign payment stablecoin issuer may be organized under the laws of or domiciled in any territory of the United States. The United States currently has five permanently inhabited territories: the four listed above and the Northern Mariana Islands.

GAAP.

The OCC is proposing to include a definition of the term GAAP in the rule. The proposed rule would define the term “GAAP” to mean the generally accepted accounting principles as used in the United States. GAAP is used in the definition of fair value and proposed subparts B and E.

Immediate family.

The OCC is proposing to define the term “immediate family” to mean the spouse of an individual, the individual's minor children, and any of the individual's children (including adults) residing in the individual's home. This term is relevant to the risk management standards concerning insider and affiliate transactions and is consistent with the definition in Regulation O (12 CFR part 215).

Insider.

The OCC is proposing to define the term “insider” to mean a principal shareholder, an executive officer, a director, or a related interest of or the immediate family member of any of these persons. This term is relevant to the risk management standards concerning insider and affiliate transactions and is adapted from the definition in Regulation O (12 CFR part 215). It has been adapted to make direct reference to the immediate family of a principal shareholder, executive officer, or director to mitigate the risk of an insider engaging in inappropriate transactions to benefit immediate family members.

Insured credit union.

The OCC proposes to define the term “insured credit union” consistent with the definition of the term in the GENIUS Act, 12 U.S.C. 5901(14). As proposed, the term “insured credit union” would have the meaning given to that term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

Insured depository institution.

The OCC is proposing to define the term “insured depository institution” consistent with the definition of the term in the GENIUS Act, 12 U.S.C. 5901(15). As proposed, the term “insured depository institution” would mean an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) and an insured credit union.

Monetary value.

The OCC is proposing to define the term “monetary value” as provided in the GENIUS Act, 12 U.S.C. 5901(17). The proposal would define “monetary value” to mean a national currency or deposit (which, as discussed above, would have the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)) denominated in a national currency.

Money.

Section 2(18) of the GENIUS Act, 12 U.S.C. 5901(18), defines “money” to mean a medium of exchange currently authorized or adopted by a domestic or foreign government, including a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries. This definition is relevant to the definition of national currency (discussed below) and certain reserve assets described in section 4(a)(1)(A)(i) and (iv) of the Act (12 U.S.C. 5903(a)(1)(A)(i) and (iv)). Section 4(a)(1)(A)(i) refers to money standing to the credit of an account with a Federal Reserve Bank. Section 4(a)(1)(A)(iv) refers to money received under a repurchase agreement that meets certain requirements. Although the statutory definition of money clearly includes monetary value, it may be unclear at any point in time whether other mediums of exchange have been authorized or adopted by a domestic or foreign government. Moreover, whether a medium of exchange meets this definition may change based on actions of foreign governments or intergovernmental organizations. While it may be relatively clear whether an asset is money standing to the credit of an account with a Federal Reserve Bank, there could be ambiguity as to whether a particular asset is money received under a repurchase agreement. Therefore, to promote clarity and uniformity for purposes of determining whether certain assets would qualify as money under proposed part 15, the OCC proposes that it would provide prior confirmation publicly that a medium of

exchange (other than those defined as monetary value) meets the definition of “money” under the GENIUS Act. Specifically, the OCC proposes to define “money” for the purposes of part 15 to mean monetary value and any other medium of exchange that the OCC has determined is currently authorized or adopted by a domestic or foreign government, including a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries. The OCC expects that it would issue such public determinations, to the extent appropriate, on its own volition or at the request of an interested party.

National currency.

The OCC is proposing to define the term “national currency” as provided in the GENIUS Act, 12 U.S.C. 5901(19). Under the proposed rule, the term “national currency” would mean (1) a Federal Reserve note (as the term is used in the first undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 411)); (2) money standing to the credit of an account with a Federal Reserve Bank; (3) money issued by a foreign central bank; or (4) money issued by an intergovernmental organization pursuant to an agreement by two or more governments.

Nonbank entity.

The OCC is proposing to define the term “nonbank entity” as provided in the GENIUS Act, 12 U.S.C. 5901(20). Specifically, the term “nonbank entity” would mean a person that is not a depository institution or subsidiary of a depository institution. Consistent with the statutory definition, a nonbank entity could include a non-subsidiary affiliate of a depository institution.

Nonpublic personal information.

The OCC is proposing to define the term “nonpublic personal information” to mean information (1) provided by a customer to a permitted payment stablecoin issuer to obtain a financial product or service, (2) about a customer resulting from any transaction involving a financial product or service between the permitted payment stablecoin issuer and a customer, or (3) otherwise obtained by the permitted stablecoin issuer in connection with providing a financial product or service to a customer. The proposed definition does not include publicly available information, unless such publicly available information, when combined with other information, would reveal the identity of a customer or would enable access to the customer's account.

OCC.

The OCC is proposing to substitute the term “OCC” for the term “Comptroller” as defined in the GENIUS Act, 12 U.S.C. 5901(4). Under the proposed rule, the term “OCC” would be defined to mean the Office of the Comptroller of the Currency. The proposed definition would refer to the organization as opposed to the individual who occupies the office. Using the term OCC is consistent with the agency's terminology in other regulations for which it has rulemaking authority.

Outstanding issuance value.

The OCC is proposing to define the term “outstanding issuance value” to mean the total consolidated par value of all of a payment stablecoin issuer's payment stablecoins. This would include the combined total par value of different brands of payment stablecoin issued by the payment stablecoin issuer (

e.g.,

under a white label arrangement) to the extent that such an arrangement complies with proposed 12 CFR part 15. The proposed definition includes the defined term “payment stablecoin” and should be read consistent with that definition, discussed below. For purposes of calculating the outstanding issuance value, the OCC believes that a digital asset that is, or is designed to be, used as a means of payment or settlement but for which there is not yet an obligation to convert, redeem, or repurchase for a fixed amount of monetary value should not be included in the calculation. A digital asset minted (

i.e.,

created on a blockchain) by an issuer to be a payment stablecoin would not be included in the calculation of outstanding issuance value until the obligation to convert, redeem, or repurchase the digital asset for a fixed amount of monetary value is incurred. Similarly, once an issuer permanently removes a payment stablecoin from circulation (

e.g.,

burns the payment stablecoin) the digital asset would cease to be included in the calculation of outstanding issuance value. Payment stablecoins for which holder access has been restricted pursuant to applicable law, regulation, or court order would remain payment stablecoins, as the issuer's obligation to convert, redeem, or repurchase for a fixed amount of monetary value continues and the associated reserves are maintained in segregated accounts pending resolution of the restriction. Likewise, if an issuer repurchased a payment stablecoin but did not burn the payment stablecoin, the stablecoin in the permitted payment stablecoin issuer's inventory would not be part of the issuer's outstanding issuance value (but would become part of the outstanding issuance value if the permitted payment stablecoin issuer subsequently put the payment stablecoin back into circulation). Therefore, the proposed definition of “outstanding issuance value” only includes payment stablecoins for which the permitted payment stablecoin issuer is obligated to convert, redeem, or repurchase for a fixed amount of monetary value (generally the issued payment stablecoins in circulation).

The OCC also considered whether the proposed “outstanding issuance value” definition should include only those payment stablecoins issued by a permitted payment stablecoin issuer, or also the payment stablecoins issued by the issuer's non-consolidated affiliates.

The OCC determined that it was appropriate to limit the proposed definition to include only the payment stablecoins issued by a permitted payment stablecoin issuer (and consolidated subsidiaries). The OCC believes that the proposed definition would scope in the appropriate permitted payment stablecoin issuers to the relevant provisions regarding reserve assets,

the frequency of examinations,

required audits,

transition to the Federal regulatory framework,

and minimum capital calculation

without being overly expansive and that it best aligns with the language in the statute. Notwithstanding the proposed definition of “outstanding issuance value,” non-consolidated affiliates of an issuer that issue payment stablecoins would separately need to comply with the requirements of the Act.

As noted above, the definition of “outstanding issuance value” includes the consolidated value of issued payment stablecoins.

See

proposed § 15.11.

See

proposed § 15.14.

See id.

See

proposed § 15.15(b).

See

proposed subpart E.

Payment stablecoin.

The OCC is proposing to define the term “payment stablecoin” consistent with the definition of the term in the GENIUS Act, 12 U.S.C. 5901(22), with certain technical changes. Under the proposal, the term “payment stablecoin” would mean a digital asset (i) that is, or is designed to be, used as a means of payment or settlement; and (ii) the issuer of which (A) is obligated to convert, redeem, or repurchase for a fixed amount of monetary value, not including a digital asset denominated in a fixed amount of monetary value; and (B) represents that such issuer will maintain, or creates the reasonable expectation that it will maintain, a stable value relative to the value of a fixed amount of monetary value.

For

a digital asset to be a payment stablecoin under proposed part 15, the issuer must be obligated to convert, redeem, or repurchase the digital asset for a fixed amount of monetary value.

The OCC interprets the statutory language in 12 U.S.C. 5901(22) to mean that the permitted payment

stablecoin issuer would be obligated to meet redemption requests at par.

The proposed definition also provides that a “payment stablecoin” does not include a digital asset that is a (i) national currency; (ii) deposit (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), including a deposit recorded using distributed ledger technology; or (iii) security, as defined in section 2 of the Securities Act of 1933 (15 U.S.C. 77b), section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c), or section 2 of the Investment Company Act of 1940 (15 U.S.C. 80a-2). The GENIUS Act's definition of “payment stablecoin” also contains language clarifying that “no bond, note, evidence of indebtedness, or investment contract that was issued by a permitted payment stablecoin issuer shall qualify as a security solely [because the issuer satisfies] the conditions in [paragraph (1) of the proposed “payment stablecoin” definition], consistent with section 17 of the Act.” The GENIUS Act provides that this language was included “for the avoidance of doubt.” The OCC determined that it was not necessary to include this language in the proposed “payment stablecoin” definition because section 17 of the GENIUS Act includes amendments to the cited Federal statutes that clarify that payment stablecoins are not securities.

Permitted payment stablecoin issuer.

The OCC is proposing to define the term “permitted payment stablecoin issuer” consistent with the definition of the term in the GENIUS Act, 12 U.S.C. 5901(23), with certain modifications. Specifically, the proposed definition would limit the definition to the entities that are subject to the OCC's jurisdiction, including State qualified payment stablecoin issuers subject to the OCC's regulatory authority under section 4 of the GENIUS Act (12 U.S.C. 5903).

In addition, the proposed definition cross-references the relevant proposed implementing provision in place of the statutory provision included in the GENIUS Act's definition. Under the proposed rule, the term “permitted payment stablecoin issuer” would mean a person formed in the United States that is a (1) subsidiary of an insured national bank or Federal savings association that has been approved to issue payment stablecoins under § 15.30; (2) Federal qualified payment stablecoin issuer; or (3) State qualified payment stablecoin issuer subject to the OCC's regulatory or enforcement authority under section 4 of the GENIUS Act (12 U.S.C. 5903).

See

Scope section-by-section analysis,

supra.

In addition, the OCC has enforcement authority pursuant to section 7(e)(2) of the GENIUS Act (12 U.S.C. 5906(e)(2)) with respect to certain nonbank State qualified payment stablecoin issuers in unusual and exigent circumstances. Proposed § 15.16 would address the requirements applicable to certain State qualified payment stablecoin issuers under unusual and exigent circumstances, but the OCC is not proposing to include State qualified payment stablecoin issuers that come within the OCC's jurisdiction solely as a result of section 7(e)(2) of the GENIUS Act within the definition of permitted payment stablecoin issuer.

Person.

The OCC is proposing to define the term “person” as the term is defined in the GENIUS Act, 12 U.S.C. 5901(24). As proposed, the term “person” would mean an individual, partnership, company, corporation, association, trust, estate, cooperative organization, or other business entity, incorporated or unincorporated.

Principal shareholder.

The OCC is proposing to define the term “principal shareholder” to mean a person who directly or indirectly or acting in concert with one or more persons, or together with members of their immediate family, will own, control, or hold 10 percent or more of the voting stock of the permitted payment stablecoin issuer or applicant. This definition is substantially similar to the definition used in the OCC's general licensing regulations in 12 CFR 5.20(d)(10).

Private key.

The OCC is proposing to define the term “private key” to mean the unique alphanumeric string that allows an individual to transfer a particular unit of a digital asset using a distributed ledger. This definition is intended to include shards of a private key.

Sharding refers to dividing a private key into distinct pieces for enhanced security.

Publicly available information.

The OCC is proposing to define the term “publicly available information” to mean any information that a person has a reasonable basis to believe is lawfully made available to the general public from: (1) Federal, State, or local government records, (2) widely distributed media; (3) disclosures to the general public that are required to be made by Federal, State, or local law; or (4) a distributed ledger.

As noted above, the term “distributed ledger” is limited to publicly available and accessible ledgers.

Registered public accounting firm.

The OCC is proposing to define the term “registered public accounting firm” as provided in the GENIUS Act, 12 U.S.C. 5901(26). Under the proposal, the term “registered public accounting firm” would mean a registered public accounting firm set forth in section 2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201).

Related interest.

The OCC is proposing to define the term “related interest” of a person to mean (1) a company that is controlled by that person; or (2) a political or campaign committee that is controlled by that person or the funds or services of which will benefit that person. This term is relevant to the risk management standards for insider and affiliate transactions and is derived from the definition in Regulation O (12 CFR part 215).

Reserve asset.

The OCC is proposing to define the term “reserve asset” to mean an asset maintained by a permitted payment stablecoin issuer of a type enumerated in § 15.11(b). A permitted payment stablecoin issuer may maintain reserve assets as a custodian.

Stablecoin Certification Review Committee.

The OCC is proposing to define the term “Stablecoin Certification Review Committee” consistent with the definition in the GENIUS Act, 12 U.S.C. 5901(27) by adopting the statutory definition. The proposed rule would define the term “Stablecoin Certification Review Committee” as having the meaning set forth in section 2 of the GENIUS Act (12 U.S.C. 5901(27)). Defining this term by cross reference to the GENIUS Act would ensure ongoing alignment between the regulatory and statutory definitions. Further, the proposed definition would ensure that the definition in this proposed part would not conflict with the actions of the U.S. Department of the Treasury, Federal Reserve, and FDIC taken pursuant to their responsibilities related to the Stablecoin Certification Review Committee under the GENIUS Act. The OCC believes adopting the definition provided in the GENIUS Act is appropriate in this instance because the changes that the OCC would otherwise make to the definition if it did not adopt the definition provided in the GENIUS Act would not alter the substantive requirements of the proposed rule for entities within its scope.

State.

The OCC is proposing to define the term “State” as provided in the GENIUS Act, 12 U.S.C. 5901(28). Under the proposed rule, the term “State” would mean each of the several States of the United States, the District of

Columbia and each territory of the United States.

United States territories are also referenced in the proposed definition of “foreign payment stablecoin issuers.” The GENIUS Act and this proposed part address the potential overlap created by inclusion of territories in both definitions by defining “foreign payment stablecoin issuers” to exclude “permitted payment stablecoin issuers.” Therefore, if a payment stablecoin issuer is a “permitted payment stablecoin issuer” because it is a “State qualified payment stablecoin issuer” that is legally established under the laws of a territory of the United States then by definition it cannot be a “foreign payment stablecoin issuer.”

State chartered depository institution.

The OCC is proposing to define the term “State chartered depository institution” as provided in the GENIUS Act, 12 U.S.C. 5901(29). Specifically, the proposed rule would define the term “State chartered depository institution” as having the meaning as set forth for “State depository institution” in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(5)).

State payment stablecoin regulator.

The OCC is proposing to define the term “State payment stablecoin regulator” as provided in the GENIUS Act, 12 U.S.C. 5901(30). As such, the OCC is proposing to define “State payment stablecoin regulator” to mean a State agency that has primary regulatory and supervisory authority in such State over entities that issue payment stablecoins.

State qualified payment stablecoin issuer.

The OCC is proposing to define the term “State qualified payment stablecoin issuer” consistent with the definition of that term in the GENIUS Act, 12 U.S.C. 5901(31), with a non-substantive, clarifying change. Under the proposed rule, the term “State qualified payment stablecoin issuer” would mean an entity that is (1) legally established under the laws of a State and approved to issue payment stablecoins by a State payment stablecoin regulator; and (2) not an uninsured national bank chartered by the OCC pursuant to title LXII of the Revised Statutes, a Federal branch, an insured depository institution, or a subsidiary of such an uninsured national bank, Federal branch, or insured depository institution. The proposed definition clarifies the definition of “State qualified payment stablecoin issuer” provided in the GENIUS Act by adding the phrase “an uninsured” before the term “national bank” in the list of excluded subsidiaries to parallel the description of excluded entities in the preceding list.

Subsidiary.

The OCC is proposing to define the term “subsidiary” as provided in the GENIUS Act, 12 U.S.C. 5901(32). Specifically, the proposed rule would define the term “subsidiary” as having the meaning set forth in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(4)). Because the term in section 3 of that Federal Deposit Insurance Act relies on the definitions of “company” and “control” in section 2 of the Bank Holding Company Act, the OCC proposes to incorporate those definitions in proposed part 15, tailored to the extent necessary, as described above.

Trading volume.

The OCC is proposing to define the term “trading volume” to mean the aggregate number of payment stablecoins issued by a permitted payment stablecoin issuer that were purchased or sold on exchanges during a specified period of time.

United States customer.

The OCC is proposing to define the term “United States customer” to mean a customer that resides in the United States.

3. Severability (Proposed § 15.3)

Proposed § 15.3 would provide that the provisions of this proposed part 15 are separate and severable from one another. If any provision is stayed or determined to be invalid, it is the OCC's intention that the remaining provisions shall continue in effect. If a provision of the rule were found to be invalid, the OCC anticipates that it would evaluate whether any re-proposal of the rule is appropriate. The OCC is proposing to include the severability clause to ensure that, in the event any particular provision of the proposed rule is held to be invalid, the remainder of the rule would continue in effect, providing clarity for market participants on how to comply with the OCC's regulations implementing the GENIUS Act pending any re-proposal.

The OCC generally intends all of its rulemakings to be severable to the extent portions of the rule are determined to be invalid regardless of the presence of a severability clause. The OCC is proposing to include an explicit severability clause to this rulemaking given the novelty and scope of the GENIUS Act and the importance of ensuring as much certainty as possible for the regulatory framework for payment stablecoins.

B. Subpart B—Permitted Payment Stablecoin Issuers and State Qualified Payment Stablecoin Issuers

1. Activities (Proposed § 15.10)

Section 4(a)(7)(A) of the GENIUS Act (12 U.S.C. 5903(a)(7)(A)) sets forth the list of activities in which a permitted payment stablecoin issuer may engage. Additionally, section 16(b) of the GENIUS Act (12 U.S.C. 5915(b)) outlines certain additional activities and investments in which permitted payment stablecoin issuers may engage.

Consistent with the statute, the OCC is proposing to mirror the permitted activities from section 4(a)(7)(A) of the GENIUS Act (12 U.S.C. 5903(a)(7)(A)) in proposed § 15.10(a)(1) through (4), which include: (1) issuing payment stablecoins; (2) redeeming payment stablecoins; (3) managing reserves related to the issuance or redemption of payment stablecoins, including purchasing, selling, and holding reserve assets or providing custodial services for reserve assets, consistent with applicable State and Federal law; and (4) providing custodial or safekeeping services for payment stablecoins, required reserves, or private keys of stablecoins consistent with the GENIUS Act, as implemented in proposed subpart C. Additionally, proposed § 15.10(a)(8) provides that a permitted payment stablecoin issuer may undertake any other activities that directly support any of the activities in proposed § 15.10(a)(1) through (4), which is explicitly provided for in section 4(a)(7)(A)(v) of the GENIUS Act (12 U.S.C. 5903(a)(7)(A)(v)). One such example of an activity that would qualify under proposed § 15.10(a)(8) because it directly supports both issuance and redemption of payment stablecoins would be the permitted payment stablecoin issuer's holding of non-payment stablecoin crypto-assets as principal necessary for testing a distributed ledger, whether internally developed or acquired from a third-party.

Such an activity may be necessary to ensure that the permitted payment stablecoin issuer may operate safely and effectively on a distributed ledger. To the extent that permitted payment stablecoin issuers are unclear about whether an activity qualifies as activity that directly supports the activities in proposed § 15.10(a)(1) through (a)(4), the OCC encourages issuers to ask the OCC directly whether an activity is permissible.

The holding of crypto-assets as principal necessary for testing otherwise permissible crypto-asset-related platforms is a permissible activity for national banks.

See

OCC Interpretive Letter 1186 (November 18, 2025).

In addition to the activities outlined in section 4(a)(7) of the GENIUS Act (12 U.S.C. 5903(a)(7)), for the sake of clarification, proposed § 15.10(a)(5) provides that permitted payment stablecoin issuers may assess fees that are associated with the purchasing or redeeming of payment stablecoins. This power is inherent in the activities described above and is explicitly

recognized in section 4(a)(1)(B)(ii) of the Act (12 U.S.C. 5903(a)(1)(B)(ii)).

The OCC also proposes to include the permitted activities outlined in section 16(b) of the GENIUS Act (12 U.S.C. 5915(b)), namely acting as principal or agent with respect to any payment stablecoin and paying fees to facilitate customer transactions.

The OCC notes that the language in section 16(b) of the Act (12 U.S.C. 5915(b)) is limited by the clause that provides that entities regulated by the primary Federal payment stablecoin regulators are “authorized to engage in the payment stablecoin activities and investments contemplated by this Act . . .” Accordingly, “acting as principal or agent with respect to any payment stablecoin” is permissible within the limited set of authorities otherwise prescribed by the GENIUS Act rather than, for example, any activity that may be conducted as principal or agent (

i.e.,

any activity involving a payment stablecoin). Therefore, proposed § 15.10(a)(6) would allow permitted payment stablecoin issuers to hold and transact in payment stablecoins as principal or agent. Payment stablecoins are not, however, a permitted reserve asset in proposed § 15.11.

To the extent a permitted payment stablecoin issuer is a “digital asset service provider,” as defined in proposed § 15.2, the issuer must also comply with the prohibition outlined in section 3(b)(2) of the GENIUS Act (12 U.S.C. 5902(b)(2)), providing that it is unlawful for any digital asset service provider to offer, sell, or otherwise make available in the United States a payment stablecoin issued by a foreign payment stablecoin issuer, unless certain conditions are met.

Section 16(b) of the Act provides in part that “Entities regulated by the primary Federal payment stablecoin regulators are authorized to engage in the payment stablecoin activities and investments contemplated by this Act, including acting as a principal or agent with respect to any payment stablecoin and payment of fees to facilitate customer transactions.” 12 U.S.C. 5915(b). The activities authorized under section 16(b) include, for example, acting as an agent for a customer with respect to the redemption of a payment stablecoin issued by a third party.

See

12 U.S.C. 5903(a)(1) (setting forth permissible reserve assets).

Consistent with section 16(b) of the GENIUS Act, proposed § 15.10(a)(7) would allow permitted payment stablecoin issuers to pay fees to facilitate customer transactions (

e.g.,

network or “gas” fees). If an issuer's payment stablecoin operates on a blockchain that assesses transaction fees, then the issuer may choose to pay transaction fees on behalf of the customer. The OCC recognizes that, if an issuer is paying transaction fees on certain distributed ledgers, the issuer may have to hold non-payment stablecoin crypto-assets to facilitate the payment of these transaction fees.

Consistent with the Act, such crypto-assets are not permitted reserve assets in proposed § 15.11.

See

OCC Interpretive Letter 1186 (November 18, 2025).

Proposed § 15.10(b) incorporates language from section 16(a) of the GENIUS Act (12 U.S.C. 5915(a)) and emphasizes that nothing in proposed § 15.10(a) 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. Consistent with this provision, for example, an uninsured national bank that is a permitted payment stablecoin issuer, may engage in fiduciary, trust, and other related activities consistent with applicable law. Similarly, a national bank or Federal savings association may provide crypto-asset custody services, either in a fiduciary or non-fiduciary capacity,

or use distributed ledger technology and related stablecoins to carry out payment activities.

See

OCC Interpretive Letter 1170 (July 22, 2020). If a national bank or Federal savings association will be offering custody services in a fiduciary capacity, it will have to comply with the provisions of 12 U.S.C. 92a and 12 CFR part 9 and 12 U.S.C. 1464(n) and 12 CFR part 150, as applicable.

See

OCC Interpretive Letter 1174 (January 4, 2021). The activities described in Interpretive Letter 1174 remain permissible to the extent that they have not been superseded by the GENIUS Act. Indeed, the Act confirms that national banks and Federal savings associations may act as principal with respect to payment stablecoins and use distributed ledgers to facilitate payments.

See

12 U.S.C. 5915. An insured national bank or Federal savings association seeking to issue a payment stablecoin would, however, need to do so through a subsidiary, as required under the GENIUS Act.

See

12 U.S.C. 5901(23) (defining permitted payment stablecoin issuer).

The rule of construction in section 4(a)(7)(B) of the GENIUS Act (12 U.S.C. 5903(a)(7)(B)) provides:

Nothing in subparagraph (A) shall limit a permitted payment stablecoin issuer from engaging in payment stablecoin activities or digital asset service provider activities specified by this Act, and activities incidental thereto, that are authorized by the primary Federal payment stablecoin regulator or the State payment stablecoin regulator, as applicable, consistent with all other Federal and State laws[.]

By its terms, this rule of construction clarifies the scope of subparagraph (A) rather than, for example, providing an independent grant of authority. Moreover, the phrase “consistent with all other Federal and State laws” indicates that the “digital asset service provider activities” and “activities incidental thereto” must be consistent with a grant of authority provided for in another Federal or State law. Therefore, to the extent that a permitted payment stablecoin issuer seeks to engage in “digital asset service provider activities” or “activities incidental thereto,” the activity must be independently authorized under another source of applicable law. If a permitted payment stablecoin issuer seeks clarity on whether “digital asset service provider activities” or “activities incidental thereto” are permissible under a different authorizing statute, the OCC encourages issuers to ask the OCC directly whether such activities are permissible.

a. Prohibited Activities

The GENIUS Act also provides for certain prohibitions for permitted payment stablecoin issuers, including the prohibition on rehypothecation in section 4(a)(2) (12 U.S.C. 5903(a)(2)), the prohibition on the use of deceptive names in section 4(a)(9) (12 U.S.C. 5903(a)(9)), the prohibition against misrepresenting insured status in section 4(e) (12 U.S.C. 5903(e)), and the prohibition on paying interest or yield in section 4(a)(11) (12 U.S.C. 5903(a)(11)).

In proposed § 15.10(c)(1), the OCC imports the prohibition on the use of a deceptive name from section 4(a)(9) of the GENIUS Act (12 U.S.C. 5903(a)(9)). This provision prohibits a permitted payment stablecoin issuer from using any combination of terms relating to the United States Government, including “United States,” “United States Government,” and “USG,” in the name of the payment stablecoin. This prohibition does not apply to abbreviations relating directly to the currency to which the payment stablecoin is pegged, such as “USD.” Consistent with section 4(a)(9) of the GENIUS Act (12 U.S.C. 5903(a)(9)), proposed § 15.10(c)(2) would prohibit permitted payment stablecoin issuers from marketing a payment stablecoin in such a way that a reasonable person would perceive the payment stablecoin to be legal tender as described in 31 U.S.C. 5103, issued by the United States, or guaranteed or approved by the Government of the United States. The OCC recognizes that permitted payment stablecoin issuers may want to market themselves as permitted payment stablecoin issuers under the GENIUS Act. There is no prohibition against issuers marketing themselves in this

manner, so long as they do not run afoul of the prohibitions outlined in proposed § 15.10(c)(1) and (2), including the prohibition against marketing a payment stablecoin in such a way that a reasonable person would perceive the payment stablecoin to be guaranteed, issued, or approved by the United States. The OCC notes that misrepresentations by a permitted payment stablecoin issuer cannot be cured by a general disclaimer and that representations and disclosures should be clear to permitted payment stablecoin holders and customers. Consistent with section 4(e) of the GENIUS Act (12 U.S.C. 5903(e)), proposed § 15.10(c)(3) would provide that a permitted payment stablecoin issuer may not directly or through implication represent that payment stablecoins are backed by the full faith and credit of the United States, guaranteed by the United States Government, or subject to Federal deposit insurance or Federal share insurance.

Consistent with section 4(a)(11) of the GENIUS Act (12 U.S.C. 5903(a)(11)), proposed § 15.10(c)(4) provides that permitted payment stablecoin issuers must not pay 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. The OCC understands that issuers could attempt to make prohibited payments of interest or yield to payment stablecoins holders through arrangements with third parties. Moreover, there likely will be a large and changing variety of arrangements with third parties in which issuers could achieve the payment of yield to payment stablecoin holders. It would not be possible to identify in detail all, or even most, of the potential arrangements between permitted payment stablecoin issuers and third parties that the OCC may prohibit under section 4(a)(11) of the GENIUS Act and the OCC's rulemaking authority under section 4(h) of the GENIUS Act,

particularly as such arrangements may evolve over time. On the other hand, a rule with only a general prohibition on the payment of yield could create uncertainty within the payment stablecoin market.

Section 4(h) of the GENIUS Act provides that the OCC and other stablecoin regulators may issue regulations to “carry out the requirements of this section, including to establish conditions, and to

prevent evasion thereof.”

12 U.S.C. 5903(h) (emphasis added).

To balance these interests, the OCC is proposing to include a presumption in paragraph (c)(4)(i) that certain types of arrangements with certain types of persons would be prohibited payments of yield or interest by the issuer. Specifically, the OCC would presume that a permitted payment stablecoin issuer is paying 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 if: (A) the permitted payment stablecoin issuer has a contract, agreement, or other arrangement with an affiliate or a related third party to pay interest or yield to the affiliate or related third party; and (B) the affiliate

or related third party (or affiliate of such related third party) has a contract, agreement, or other arrangement to pay interest or yield (whether in cash, tokens, or other consideration) to a holder of any payment stablecoin issued by the permitted stablecoin issuer solely in connection with the holding, use, or retention of such payment stablecoin. To the extent that the person, or an affiliate of the person with whom the permitted payment stablecoin issuer has a contract, agreement, or other arrangement to pay interest or yield is a related third party of the permitted payment stablecoin issuer because the permitted payment stablecoin issuer issues payment stablecoins on the related third party's behalf or under the related third party's branding, the arrangement between the related third party and the holder of the payment stablecoin would consider the holder of the payment stablecoin to be the holder of the payment stablecoin issued by the permitted payment stablecoin issuer on the related third party's behalf or under the related third party's branding. That is to say, with respect to a white-label relationship, the presumption would be triggered only to the extent the payment stablecoin holder is a holder of the related third party's white-labeled stablecoin (as opposed to other payment stablecoins issued by the permitted payment stablecoin issuer).

A person would not be included within this second prong solely because the person is an affiliate of an affiliate of the issuer.

Related third parties would be defined to include any person paying interest or yield to payment stablecoin holders as a service (

i.e.,

on behalf of the permitted payment stablecoin issuer) and any person that the issuer issues payment stablecoins on behalf or under the branding of (

i.e.,

persons that have entered white-label relationship with the issuer). The OCC believes that the close nexus to the issuer's payments and payments to the payment stablecoin holder as well as the close contractual or control relationship between the issuer and the other party would make it highly likely that the issuer's payments of yield or interest would be made to the holder through an intermediary or an attempt the evade the GENIUS Act's prohibition on interest and yield payments. Nonetheless, the OCC would permit the issuer to rebut the presumption given the issuer provides sufficient evidence to the contrary. Specifically, a permitted payment stablecoin issuer may rebut the presumption by submitting written materials that, in the OCC's judgment, demonstrate that the contract, agreement, or other arrangement is not prohibited under paragraph (c)(4) and is not an attempt to evade the prohibition.

Other arrangements that are not captured by the presumption may also violate the statutory prohibition or constitute an evasion thereof. The OCC would assess those arrangements on a case-by-case basis but does not believe that it is necessary to include other arrangements within the rebuttable presumption at this time. The prohibition is not intended to prevent a merchant from independently offering a discount to a payment stablecoin holder for using payment stablecoins. The prohibition is also not intended to prevent a permitted payment stablecoin issuer from sharing in the profits derived from the payment stablecoin with a non-affiliate partner in a white-label arrangement.

In proposed § 15.10(c)(5), the OCC proposes to include the language from 12 U.S.C. 5903(a)(2) that prohibits permitted payment stablecoin issuers from pledging, rehypothecating, or reusing any reserve assets required under 12 U.S.C. 5903(a)(1), except for the purposes listed in section 4(a)(2) of the GENIUS Act (12 U.S.C. 5903(a)(2)). Thus, consistent with the statute, a permitted payment stablecoin issuer may not pledge, rehypothecate, or re-use any reserve assets, either directly or indirectly (

e.g.,

through a third-party custodian of the reserve assets), except for the purpose of: (i) satisfying margin obligations in connection with investments in permitted reserves under proposed § 15.11(b)(4) or (5); (ii) satisfying obligations associated with the use, receipt, or provision of standard custodial services;

or (iii) creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills with a

maturity of 93 days or less may be sold as purchased securities in repurchase agreements,

provided that either: (A) the repurchase agreements are cleared by a clearing agency registered with the Securities and Exchange Commission; or (B) the permitted payment stablecoin issuer receives prior approval from the OCC. By including the phrase “directly or indirectly” in the prohibition, it is clear that Congress intended that a custodian that holds the reserves on behalf of a permitted payment stablecoin issuer also may not pledge, rehypothecate or reuse any of the reserve assets, other than with respect to the limited exceptions discussed in proposed § 15.10(c)(5). To the extent that a custodian holding the payment stablecoin reserves were allowed to bypass this prohibition, it would undermine the relatively safe nature of the reserve assets and the confidence that payment stablecoin holders have that the payment stablecoin will hold its peg.

The OCC interprets this exception, codified in 12 U.S.C. 5903(a)(2)(B), as being related solely to the purposes specified in 12 U.S.C. 5909(c)(2)(B).

Section 4(a)(2)(C) of the Act (12 U.S.C. 5903(a)(2)(C)) states that reserves in the form of Treasury bills may be sold as purchased securities for repurchase agreements with a maturity of 93 days or less if certain conditions are met. The OCC proposes to clarify, consistent with section 4(a)(1)(iv) of the Act (12 U.S.C. 5903(a)(1)(iv)), that the Treasury bills sold under the repurchase agreement must have a maturity of 93 days or less. Consistent with this clarification and the OCC's proposed approval of repurchase agreements under section 4(a)(2)(C) of the Act, discussed below, the maturity of the repurchase agreement would be overnight.

The OCC will deem any repurchase agreement approved under this section and section 4(a)(2)(C) of the Act, provided that the Treasury bills sold as purchased securities have a maturity of 93 days or less, consistent with the requirement that Treasury bills held as reserve assets must have a maturity of 93 days or less, and the liquidity obtained through repurchase borrowings is not being obtained solely for purposes other than meeting redemption requests or compliance with the requirements of this proposed rule. The OCC believes that providing this prior approval by rule will enhance the ability of permitted payment stablecoin issuers to obtain liquidity quickly (through outright sales or repurchase agreements) and thereby facilitate the timely redemption of payment stablecoins. It is clear from section 4(a)(1)(A) of the Act (12 U.S.C. 5903(a)(1)(A)) that permitted payment stablecoin issuers may maintain identifiable reserves comprising of money received under certain repurchase agreements. It would frustrate section 4(a)(1)(A)(iv)'s clear permission to maintain such reserve assets if permitted payment stablecoin issuers could only engage in repurchase borrowing transactions upon the completion of cumbersome procedures and one-off supervisory approvals. The ability to obtain immediate liquidity through repurchase borrowings is useful and supplements a permitted payment stablecoin issuer's ability to access immediate liquidity via other means (for example, the maintenance of bank deposits or actual sales of securities). The prohibition on rehypothecation in proposed § 15.10(c)(5) would, consistent with section 4(a)(2)(C) of the Act, prohibit rehypothecation except for the purpose of creating liquidity to meet reasonable expectations of requests for redemption. However, given the fungibility of money, the OCC will not scrutinize the exact uses to which repurchase borrowing proceeds are put. The limited circumstances in which the OCC would not consider rehypothecation permissible would be if repurchase borrowings are obtained solely for some purpose other than obtaining liquidity to meet redemption requests or compliance with the rule—for example, if repurchase proceeds are to be used solely for paying dividends to a permitted payment stablecoin issuer (

i.e.,

removing excess reserve assets above the required minimum).

Section 4(h)(1) of the GENIUS Act (12 U.S.C. 5903(h)(1)) provides that the OCC may issue regulations to “carry out the requirements of this section . . . and to prevent evasion thereof

.”

In proposed § 15.10(c)(6), consistent with this statutory authority, the OCC proposes language that provides that a permitted payment stablecoin issuer must not engage in any activity that the OCC determines is an evasion of the requirements of section 4 of the GENIUS Act (12 U.S.C. 5903) or Part 15.

The OCC has considered and is requesting comment on whether to prohibit a permitted payment stablecoin issuer from issuing more than one brand of payment stablecoin (

i.e.,

more than one set of payment stablecoins marketed under the same name). The OCC recognizes that there are advantages and disadvantages associated with permitting a payment stablecoin issuer to issue multiple brands of stablecoin that may be co-branded with a named partner in a white label arrangement. These arrangements can allow parties to leverage the experience and expertise of a permitted payment stablecoin issuer and facilitate a broader range of stablecoins in the market. However, they may also foster uncertainty about reserve assets and encourage contagion and run risk among brands of payment stablecoins, including but not limited to brands issued by one issuer. One possibility that the OCC has considered and is requesting comment on is to restrict each permitted payment stablecoin issuer to issuing only one brand of payment stablecoin but to streamline the process for approving applications to become a permitted payment stablecoin issuer if an affiliate has already been approved. Under this approach, multiple permitted payment stablecoin issuers could share certain services and back-office functions with each other and might operate under a common risk management framework, but each issuer would be legally separate. This approach would allow an entity to leverage its experience and expertise but may provide more certainty with respect to the rights of payment stablecoin holders in the event that a permitted payment stablecoin issuer becomes insolvent.

The OCC has also considered and is requesting comment on whether to prohibit a permitted payment stablecoin issuer from engaging in unsafe or unsound practices. Pursuant to section 6(a)(3) of the GENIUS Act (12 U.S.C. 5905(a)(3)), the OCC has the ability to examine permitted payment stablecoin issuers for risks that may pose a threat to safety and soundness. Section 4(b)(1) of the Act (12 U.S.C. 5903(b)(1)) also provides the OCC the ability to issue regulations to ensure financial stability. It follows from these provisions that permitted payment stablecoin issuers should not be allowed to engage in practices that are unsafe or unsound. Explicitly prohibiting such activities may help the OCC to address practices that could undermine public confidence in permitted payment stablecoin issuers and the financial system more generally.

2. Reserve Assets (Proposed § 15.11)

Proposed § 15.11 contains requirements applicable to reserve assets. Section 4(a)(1)(A) of the Act (12 U.S.C. 5903(a)(1)(A)) provides that a permitted payment stablecoin issuer must maintain identifiable reserves backing the outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least one-to-one basis and specifies the eight permissible reserve asset types. The one-to-one backing requirement applies at the permitted payment stablecoin issuer-level. An issuer would not comply with this requirement if it did not maintain reserve assets sufficient to meet the one-to-one backing requirement. A permitted payment stablecoin issuer may maintain reserve assets through a custodian, including an affiliate acting as a custodian, as long as the custodian qualifies as an eligible financial institution.

Proposed § 15.11(a)(1) would require that permitted payment stablecoin issuers maintain reserve assets that: (i) are identifiable; (ii) are segregated from and not commingled with other assets owned or held by the permitted payment stablecoin issuer; (iii) at all times have a total fair value that equals or exceeds the outstanding issuance value of the permitted payment stablecoin issuer; and (iv) are either held directly by the permitted payment stablecoin issuer or within the custody of an eligible financial institution. In order to maintain reserve assets that are “identifiable” and comply with proposed § 15.11(a)(1)(i), permitted payment stablecoin issuers must maintain appropriate records to ensure documented ownership and legal entitlement to individual reserve assets. Similarly, any ownership arrangements, including ownership via custodians, must comply with applicable laws and regulations, for example, requirements applicable to customer securities owned through the Fedwire Securities Service. The OCC generally anticipates that reserve assets will be recorded on the permitted payment stablecoin issuer's balance sheet under GAAP and be included in the quarterly reports required under proposed § 15.14(i) and on Call Report Schedule RC, Balance Sheet, for a parent insured national bank or Federal savings association. An issuer must maintain the appropriate operational capabilities, internal controls, policies, and safeguards to ensure that stablecoins are always backed by reserves on an at least 1 to 1 basis. Among other things, safeguards may include mechanisms to prevent the issuance of abnormally large amounts of new stablecoins without additional approvals.

C.f.,

Dylan Butts, “PayPal's crypto partner mints a whopping $300 trillion worth of stablecoins in `technical error,' ” CNBC (October 16, 2025),

https://www.cnbc.com/2025/10/16/paypals-crypto-partner-mints-300-trillion-stablecoins-in-technical-error.html

(describing a technical error leading to the minting of a large amount of new stablecoins).

To comply with the requirement in proposed § 15.11(a)(1)(iii), a permitted payment stablecoin issuer must ensure that the fair value of reserve assets equal or exceed the outstanding issuance value of the outstanding payment stablecoins issued by the permitted payment stablecoin issuer at all times. Valuing reserve assets at fair value (

i.e.,

market value), rather than another measure, such as amortized cost, will help ensure that the reserve assets maintained by the permitted payment stablecoin issuer reflect current prices and will be monetizable at a value sufficient to meet any redemption requests at par value. Notably, the outstanding issuance value is based on the total consolidated par value of all of a permitted payment stablecoin issuer's payment stablecoins rather than on the fair value of the outstanding issued payment stablecoin. Thus, if the fair value of the payment stablecoin decreased (

i.e.,

if the payment stablecoin de-pegged in the secondary market), the permitted payment stablecoin issuer would nevertheless be obligated to retain a stock of reserve assets, the fair value of which equals or exceeds the par value of outstanding payment stablecoins. This approach is intended to ensure that the permitted payment stablecoin issuer is able to credibly meet redemption requests, including in adverse circumstances. To take a contrary approach (

e.g.,

basing the outstanding issuance value on the fair value of payment stablecoins) could allow permitted payment stablecoin issuers to inappropriately remove assets from the required stock of reserve assets when stablecoins de-peg (as reserve asset requirements decline, along the with the secondary market price of the stablecoin), rather than maintaining the reserve assets on behalf of stablecoin holders, which may in turn exacerbate run risk for a permitted payment stablecoin issuer.

Proposed § 15.11(a)(1)(iv) provides that the reserve assets must either be held directly by the permitted payment stablecoin issuer or within the custody of an eligible financial institution, which is defined in proposed § 15.2.

Proposed § 15.11(a)(2) would require that a permitted payment stablecoin issuer demonstrate the operational capability to access and monetize the identifiable reserve assets, commensurate with the permitted payment stablecoin issuer's risk profile and business model. The issuer must be able to monetize the reserve assets, potentially quickly and at short notice, in order to meet redemption requests. The inability to quickly monetize reserve assets would undermine the ability of a permitted payment stablecoin issuer to maintain the stable value of its payment stablecoin.

To comply with proposed § 15.11(a)(2), a permitted payment stablecoin issuer must be able to demonstrate the ability to monetize all types of reserve assets it maintains. Depending on a permitted payment stablecoin issuer's size, risk profile, business model, activities, and operations, a permitted payment stablecoin issuer may be able to demonstrate monetization in different ways. For example, it may be sufficient for some permitted payment stablecoin issuers to demonstrate the ability to monetize Treasury bills they hold as reserve assets by establishing that they maintain appropriate repurchase arrangements through which they can quickly sell Treasury bills and receive liquid funds with which they can satisfy redemption requests. For other permitted payment stablecoin issuers, for example, larger permitted payment stablecoin issuers or permitted payment stablecoin issuers with more complicated operations, additional measures may be appropriate to demonstrate the operational capability to monetize. It may be appropriate for such permitted payment stablecoin issuers to maintain multiple alternative methods of monetization (for example, multiple repurchase agreement lines or repurchase agreement lines plus arrangements allowing outright sales of Treasury securities) in order to satisfactorily demonstrate the ability to monetize their reserve assets. Such redundant arrangements may be necessary if a permitted payment stablecoin issuer maintains a sufficiently large Treasury position that it could be difficult to monetize the entire position through transactions with a single repo counterparty or if a permitted payment stablecoin issuer maintains concentrated positions in particular types of reserve assets. The availability of multiple monetization channels helps ensure that a permitted payment stablecoin issuer is not required to monetize assets at reduced or “fire sale” prices. Having alternative monetization channels reduces the risk that a permitted payment stablecoin issuer would be obliged to accept unfavorable pricing when monetizing reserve assets under stress. For certain permitted payment stablecoin issuers, it may be necessary to periodically conduct actual monetization transactions (that is, actual outright sales or repurchase transactions) in order to demonstrate the ability to monetize. Actual transactions can more fully confirm that monetization capabilities exist. In the absence of actual test transactions, potential barriers to monetization may still exist. Permitted payment stablecoin issuers may lack the procedures and systems to monetize assets at any time in accordance with standard settlement periods and processes. For example, borrowing agreements may name authorizing officials that are unavailable or inappropriate. Actual monetization transactions may be necessary, for example, for permitted payment stablecoin issuers with unusually complicated operations or

organizational structures, or for permitted payment stablecoin issuers that are particularly dependent on certain monetization channels or the ability to monetize particular assets. Periodic actual monetization transactions can minimize the risk of negative signaling during financial stress. If a permitted payment stablecoin issuer begins using a monetization channel that it has not regularly used in the past, that may spark concerns about the financial health of the issuer. For example, if a permitted payment stablecoin issuer has pre-established a repurchase agreement with a bilateral counterparty but never utilized it, sudden utilization of the repurchase agreement may generate concerns that the issuer is experiencing a run on its stablecoins. Periodic test transactions using multiple monetization channels can mitigate such concerns and may be particularly important for large, systemically important issuers where concerns about financial distress are more likely to contribute to contagion. Permitted payment stablecoin issuers may be able to demonstrate the ability to execute actual monetization transactions in the ordinary course of their business (for example, redeeming stablecoins) and would not necessarily be required to engage in additional test transactions.

Proposed § 15.11(a)(3) would include requirements for when permitted payment stablecoin issuers could withdraw reserve assets in excess of outstanding issuance value. In order to ensure that at all sufficient reserve assets are maintained to back outstanding stablecoin issuance, permitted payment stablecoin issuers would be able to withdraw excess reserve assets only after the monthly examination and certification required by section 4(a)(3) of the GENIUS Act (12 U.S.C. 5903(a)(3)) and provided for in proposed § 15.11(e) and (f). Specifically, permitted payment stablecoin issuers would be able to withdraw any surplus reserve assets in excess of outstanding issuance value, calculated and reported as of the last day of the previous month, only upon the publication of that month's public disclosure, due at the end of the subsequent month. Only permitting an issuer to withdraw surplus reserve assets after examination and certification will promote public confidence about the integrity of the handling of reserve assets. Permitting withdrawal of excess reserve assets at other intervals would significantly undermine the purpose of examination and certification. If permitted payment stablecoin issuers were able to withdraw excess reserve assets at any time, based only upon their own internal calculations, that could undermine confidence and even create concerns about misconduct, for example if a permitted payment stablecoin issuer might make its own bad faith and un-validated determination that an excess existed in order to justify a withdrawal. Proposed § 15.11(a)(3) would also require that, while withdrawals would be based on calculations as of the end of the previous month, a permitted payment stablecoin issuer could only make withdrawals if the remaining reserve assets remained at least equal to the current outstanding issuance value, calculated as of the day of withdrawal.

Under proposed § 15.11(b), reserve assets must only comprise: (1) United States coins and currency (including Federal Reserve notes) or money standing to the credit of an account with a Federal Reserve Bank; (2) funds held as deposits or insured shares payable upon demand at an insured depository institution (including any foreign branches or agents, including correspondent banks, of an insured depository institution), subject to any limitation established by the FDIC and the National Credit Union Administration, as applicable, pursuant to section 4(a)(1)(A)(ii) of the GENIUS Act (12 U.S.C. 5903(a)(1)(A)(ii)) to address safety and soundness risks of such insured depository institution; (3) Treasury bills, Treasury notes, or Treasury bonds with a remaining maturity of 93 days or less;

(4) money received under repurchase agreements, with the permitted payment stablecoin issuer acting as a seller of securities and with a no longer than overnight maturity, that are backed by Treasury bills with a maturity of 93 days or less;

(5) reverse repurchase agreements, with the permitted payment stablecoin issuer acting as a purchaser of securities and with a no longer than overnight maturity, that are 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, that are: (i) tri-party; (ii) centrally cleared through a clearing agency registered with the Securities and Exchange Commission; or (iii) bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress; (6) securities issued by an investment company registered under section 8(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-8(a)), or other registered Government money market fund, and that are invested solely in underlying assets described in proposed § 15.11(b)(1) through (5);

(7) any other similarly liquid Federal Government-issued asset approved by the OCC, in consultation with the State payment stablecoin regulator, if applicable, of the permitted payment stablecoin issuer; or (8) any reserve described in proposed § 15.11(b)(1) through (3), (6), or (7), in tokenized form, provided that such reserves comply with all applicable laws and regulations. The OCC encourages any permitted payment stablecoin issuer that seeks clarity on whether a specific tokenized asset qualifies as a permissible reserve asset under proposed § 15.11(b)(8) to seek an opinion from the OCC as to whether the asset qualifies. To the extent feasible, the OCC is considering publishing a list of, or otherwise making public, the acceptable tokenized reserve assets for the sake of transparency. In determining whether a potential reserve asset qualifies as “any other similarly liquid Federal Government-issued asset,” under proposed § 15.11(b)(7) the OCC will consider, among other relevant factors, whether: (i) the asset has liquidity characteristics, including during times of stress, comparable to the other reserve assets allowed under proposed § 15.11(b); (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 the assets allowed under proposed § 15.11(b), 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.

The GENIUS Act permits the inclusion of Treasury bills, notes, or bonds “(I) with a remaining maturity of 93 days or less; or (II) issued with a maturity of 93 days or less.” The proposed rule would combine these categories since the former category includes the latter, at least for purposes of complying with the requirements of proposed § 15.11. Permitted payment stablecoin issuers may choose to categorize these assets separately for other reasons, for example accounting or risk management purposes.

The proposed rule would clarify that a repurchase agreement or reverse repurchase agreement with an intraday maturity could qualify as a permitted reserve asset. Section 4(a)(1)(A)(iv) and (v) of the Act (12 U.S.C. 5903(a)(1)(A(iv) and (v))) specifically refers to repurchase agreements and reverse repurchase agreements with an overnight maturity. The OCC believes that this provision is intended to permit repurchase agreements and reverse repurchase agreements with a maturity no longer than overnight. Thus, the proposed rule would explicitly permit the use of intraday repurchase agreements and reverse repurchase agreements.

A money market fund that invests in any other assets, including in Treasury securities with a remaining maturity longer than 93 days, would not be eligible to be held as a reserve asset.

Section 4(a)(4)(A)(iii) of the Act (12 U.S.C. 5903(a)(4)(A)(iii)) requires the OCC to issue regulations implementing reserve asset diversification, including deposit concentration at banking institutions and interest rate risk management standards that (1) are tailored to the business model and risk profile of permitted payment stablecoin issuers and (2) do not exceed standards that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers. Accordingly, the proposed rule includes two alternative options in proposed § 15.11(c), only one of which would be selected in the final rule. “Option A” would include a principles-based general requirement with an optional safe harbor containing quantitative requirements. “Option B” would make the quantitative requirements mandatory for all issuers. Option A's principle-based general requirement would require a permitted payment stablecoin issuer to maintain reserve assets that are sufficiently diverse to manage potential credit, liquidity, interest rate, and price risks. In addition, the principles-based requirement in Option A in proposed § 15.11(c) would require a permitted payment stablecoin issuer to measure and manage the risk that concentrating reserve assets at one eligible financial institution or a small number of eligible financial institutions may impair the ability of a permitted payment stablecoin issuer to satisfy redemption demands if individual eligible financial institutions are unable to return, or if there is a delay in returning, reserve assets placed by a permitted payment stablecoin issuer.

The proposed rule's diversification and concentration requirements would apply to custodial relationships, including sub-custodial arrangements. Permitted payment stablecoin issuers would be expected to “look through” any sub-custodial relationships to ensure that reserve assets are custodied at the sufficiently diverse number of eligible financial institutions needed to comply with the proposed rule's requirements. Without this requirement, a permitted payment stablecoin issuer might supposedly have its stock of Treasury securities custodied at multiple eligible financial institutions, but sub-custodial relationships could result in the entire stock being custodied at only a single eligible financial institution.

Eligible financial institutions that hold reserve assets in custody or safekeeping must be subject to supervision and comply with the requirements set forth in section 10 of the GENIUS Act (12 U.S.C. 5909). Institutions subject to OCC supervision would need to comply with the requirements set forth in proposed subpart C of part 15.

Permitted payment stablecoin issuers with less complex business models and lower risk profiles may be able to maintain a less diverse stock of reserve assets than permitted payment stablecoin issuers with more complex business models or higher risk profiles. However, the OCC interprets section 4(a)(4)(A)(iii) of the GENIUS Act (12 U.S.C. 5903(a)(4)(A)(iii)) as mandating some reserve asset diversification for all permitted payment stablecoin issuers, both in types of reserve assets maintained and in the number of eligible financial institutions holding a permitted payment stablecoin issuer's reserve assets.

The OCC expects that it would be unlikely, for example, that a permitted payment stablecoin issuer, even one with a simple business model and low risk profile, could satisfy the requirements in proposed § 15.11(c) by placing all its reserve assets at a single eligible financial institution. Such a reliance on a single third-party location of reserve assets could expose the permitted payment stablecoin issuer to the unnecessary risk that its reserve assets, or some portion of them, could be unavailable to meet redemption requests. Similarly, the OCC expects that all permitted payment stablecoin issuers will need to maintain multiple reserve asset types, if only to serve as a back-up to what is otherwise a permitted payment stablecoin issuer's primary reserve asset. Some permitted payment stablecoin issuers may need to maintain more robustly diverse stocks of reserve assets to satisfy proposed § 15.11(c), depending on their business model, risk profile, and other relevant factors. For example, a large permitted payment stablecoin issuer with complex operations may need to maintain deposits with multiple eligible financial institutions, as well as a stock of Treasury bills, potentially custodied with more than one eligible financial institution in order to ensure they are capable of being monetized during periods of financial stress. Factors such as the number of parties that redeem directly with the permitted payment 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 could all increase the complexity of the permitted payment stablecoin issuer's operations and weigh in favor of maintaining multiple different pools of reserve assets. Permitted payment stablecoin issuers may be able to comply with this requirement by maintaining multiple deposit accounts directly, or through deposit placement services, as they can comply with the requirement in proposed § 15.11(a)(2) to demonstrate the operational capability to access and monetize the reserve assets.

A permitted payment stablecoin issuer that maintains ownership and control of all of its own reserve assets, rather than relying on separate eligible financial institutions, may be able to satisfy the principles-based general diversification and concentration requirement in Option A, depending on the permitted payment stablecoin issuer's particular circumstances. While explicitly requiring all permitted payment stablecoin issuers to maintain some reserve assets at a third-party eligible financial institution may help promote confidence that a permitted payment stablecoin issuer's reserve assets are diversified across multiple eligible financial institutions, such a requirement may be unnecessary if the permitted stablecoin issuer is able to establish its own secure control over the reserve assets. Any permitted payment stablecoin issuer maintaining direct ownership and control of reserve assets would still be subject to all requirements in proposed § 15.11, notably the requirement in proposed § 15.11(a)(2) under which the permitted payment stablecoin issuer must demonstrate the operational capability to access and monetize reserve assets. A permitted payment stablecoin issuer that maintains ownership and control of its own assets may fail to satisfy this requirement, or the diversification and concentration requirements in proposed § 15.11(c), if the permitted payment stablecoin issuer, for example, relies exclusively on arrangements with a single eligible financial institution to monetize its reserve assets.

Option A contains a safe harbor under which a permitted payment stablecoin issuer would be deemed to satisfy proposed § 15.11(c) if the permitted payment stablecoin issuer maintains on each business day: (i) at least 10 percent of its required reserve assets as deposits or insured shares payable upon demand or money standing to the credit of an account with a Federal Reserve Bank; (ii) at least 30 percent of its reserve assets as deposits or insured shares payable upon demand, money standing to the credit of an account with a Federal Reserve Bank, or amounts receivable and due unconditionally within five business days on pending sales of reserve assets, maturing reserve assets, or other maturing transactions (

e.g.,

reverse repurchase agreements); (iii) no more than 40 percent 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; (iv) no more than 50 percent of the amount provided in proposed § 15.11(c)(2)(i) at any one eligible financial institution; and (v) reserve assets with a weighted average maturity

of no more than 20 days.

This safe harbor would give permitted payment stablecoin issuers a transparent and standardized target for achieving compliance with reserve asset diversification requirements.

However, under Option A, meeting the safe harbor is not the only means to comply with proposed § 15.11(c). Some issuers, particularly smaller and less complex issuers, may be able to comply with § 15.11(c) without meeting the minimum levels in the safe harbor. For example, if a smaller permitted payment stablecoin issuer with a comparatively simple business model and lower risk profile finds it commercially useful to maintain more of its reserve assets as demand deposits, the permitted payment stablecoin issuer may be able to satisfy proposed § 15.11(c) even if the permitted payment stablecoin issuer maintains more than 10 percent of its reserve assets as deposits at one eligible financial institution, depending on particular facts and circumstances. This flexibility is consistent with the GENIUS Act's requirements that the proposed asset diversification requirements be “tailored to the business model and risk profile of permitted payment stablecoin issuers.”

Weighted average maturity is computed as the sum of the product of each reserve asset's (1) remaining maturity and (2) percentage of the total pool of reserve assets (based on principal value). A deposit or insured share payable upon demand would have a weighted average maturity of zero. The OCC invites comments on whether the proposed rule should include an express definition of weighted average maturity, particularly whether the OCC should adopt the same definition used in SEC Rule 2a-7 (17 CFR 270.2a-7). Paragraph (i) of SEC Rule 2a-7 provides that, for certain securities and transactions, maturity should not necessarily be the time remaining until ultimate repayment of principal but instead should be based on other characteristics (for example, the time until an interest rate reset or until demand repayment options can be exercised). The OCC invites comment on whether this proposed rule should include these same maturity assumptions for certain reserve assets. The proposed rule does not include these maturity assumptions since they should not be relevant for most or all permissible reserve assets. Even if the maturity assumptions are relevant for certain reserve assets that might be permissible (for example, Floating Rate Treasury Notes), the OCC expects that the limited maturity of reserve assets (93 days or less) will diminish the value of applying maturity assumptions. Accordingly, under the proposed rule, the OCC expects that the maturity of all reserve assets, for purposes of calculating weighted average maturity, will be the time remaining until the repayment of principal.

The OCC recognizes that, as a permitted payment stablecoin issuer sells more liquid assets to meet redemption requests in times of stress, it may temporarily fail to satisfy the terms of the proposed safe harbor. A permitted payment stablecoin issuer should appropriately diversify its reserve assets as soon as practicable following such an event. However, at no point, can a permitted payment stablecoin issuer's reserve assets be less than the fair value of the outstanding issuance value of the permitted payment stablecoin issuer as required in proposed § 15.11(a)(1)(iii).

12 U.S.C. 5903(a)(4)(A)(iii)(I).

The safe harbor's requirement that a permitted payment stablecoin issuer maintain at least 10 percent of its reserve assets as “daily liquidity”: demand deposits or money standing to the credit of an account with a Federal Reserve Bank would help ensure that a permitted payment stablecoin issuer has readily available funds necessary to meet redemption requests. While all of the proposed reserve assets should be liquid and easily monetizable, the requirement to have some minimum level of immediately liquid funds is additional protection against the risk that a permitted payment stablecoin issuer would be unable to meet redemption requests in a timely manner, which is critical to avoid in order to maintain confidence in the permitted payment stablecoin issuer and the stablecoin industry as a whole. A minimum requirement of 10 percent would be in line with the largest 1-day redemption events experienced by stablecoin issuers.

The OCC invites comment on whether an alternate minimum is appropriate.

Although the OCC referenced SEC Rule 2a-7 when drafting these requirements due to certain similarities between money market funds and permitted payment stablecoin issuers, the proposed requirements diverge in certain respects based on inherent differences between the two (

e.g.,

reserve asset composition).

Including a baseline requirement to maintain a minimum percentage of liquidity that is immediately available (without the need to sell any assets, even highly liquid assets like Treasury securities) will help ensure a permitted payment stablecoin issuer's ability to meet redemption requests. The OCC invites comments on these and other considerations, particularly on whether conservative liquidity requirements are necessary. The proposed rule includes robust liquidity requirements but does not include capital-based overcollateralization or reserve asset buffer requirements. An alternative possibility would be to remove some of the proposed liquidity requirements, though this may warrant increased capital or buffer requirements.

The safe harbor would also require that a permitted payment stablecoin issuer maintains at least 30 percent of its reserve assets as deposits or insured shares payable upon demand, money standing to the credit of an account with a Federal Reserve Bank, or amounts receivable and due unconditionally within five business days on pending sales of reserve assets, maturing reserve assets, or other maturing transactions. This “weekly” liquidity would help ensure that a permitted payment stablecoin issuer is able to meet a series of redemption requests that takes place over multiple days. It will also help prevent issuers from meeting the “daily” liquidity requirement but otherwise maintaining a stock of assets that are less readily monetizable. A minimum requirement of 30 percent “weekly” liquidity would protect issuers against redemption runs that take place over multiple days, a phenomenon experienced by stablecoin issuers in the past, and a 30 percent minimum requirement would exceed the redemption volumes seen during these redemption runs. In the absence of a minimum “weekly” (or other multi-day) requirement, an issuer might only have its stock of 10 percent immediately available liquidity plus owned securities that it would have to actually sell in order to monetize and meet redemption requests. While permitted payment stablecoin issuers must be prepared to monetize any such securities, it would be safer to have a stock of liquid funds that will automatically become available over the next several days as a first line of defense against multi-day redemption runs.

The safe harbor would also require that a permitted payment stablecoin issuer maintains no more than 40 percent 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. This requirement would prevent an issuer from being overly exposed to any one eligible financial institution. The spring 2023 bank stress highlighted the risk that a stablecoin issuer's reserve assets could be concentrated at one financial institution.

While this requirement would not eliminate the chance of losing reserve assets because of distress at an eligible financial institution holding reserve assets—or temporarily losing access to reserve assets—this requirement would ensure that

permitted payment stablecoin issuers have other stocks of reserve assets available to satisfy redemption requests. This requirement is meant to capture all potential exposures to a counterparty. A permitted payment stablecoin issuer could maintain deposits at a depository institution while at the same have an affiliate of that depository institution maintain custody of the issuer's securities or serve as a counterparty in repurchase or reverse repurchase transactions. All of these transactions could expose a permitted payment stablecoin issuer's reserve assets to the health of a single eligible financial institution. Accordingly, this requirement would aggregate exposures to prevent excessive exposure to any one eligible financial institution. The phrase “or other exposures” is meant to capture any other exposure that creates a similar risk. The OCC invites comments on alternate minimums besides 40 percent; the 40 percent measure would ensure that no one eligible financial institution would have a majority of a permitted payment stablecoin issuer's reserve assets and that permitted payment stablecoin issuers spread relationships and operational capabilities across multiple eligible financial institutions in a way that prevents a permitted payment stablecoin issuer coming to rely excessively on one eligible financial institution.

See, e.g.,

Vicky Ge Huang et al., “Circle's USDC Stablecoin Breaks Peg With $3.3 Billion Stuck at Silicon Valley Bank,” Wall St. J. (March 11, 2023),

https://www.wsj.com/articles/crypto-investors-cash-out-2-billion-in-usd-coin-after-bank-collapse-1338a80f?gaa_at=eafs&gaa_n=AWEtsqf6BGnzdLQv1oreAgKgnxQABkxhGMynOVp91Xs-RK02mjbolX7BJSkJ&gaa_ts=695a9bd0&gaa_sig=w4Oq80vSPZ596PZfArhzEcuuNsxMb2j69bfMwUqUB_reNYXHtEGgTB4fFwAj_zInsT7lUc5cSlYJbYUb4dEV_g%3D%3D.

The safe harbor would also require that a permitted payment stablecoin issuer maintain no more than 50 percent of the required daily liquidity specified under proposed paragraph (c)(2)(i) at any one eligible financial institution. This requirement would guard against the risk that problems at one eligible financial institution prevent a permitted payment stablecoin issuer from accessing its reserve assets. If a permitted payment stablecoin issuer is dependent on one eligible financial institution to maintain all or a large portion of its reserve assets, the permitted payment stablecoin issuer may be excessively exposed to, for example, operational concerns at that eligible financial institution or even the risk of the institution's failure.

Proposed § 15.11(c)(2)(i) is designed to ensure that permitted payment stablecoin issuers have a sufficient minimum amount of readily available funds to meet redemption requests. However, if that entire amount consists of deposits at one insured depository institution, the permitted payment stablecoin issuer is exposed to the risk that problems at that insured depository institution could wholly prevent the permitted payment stablecoin issuer from accessing its readily available funds. Having at least one other stock of readily available funds as part of a permitted payment stablecoin issuer's reserve assets would help ensure that some readily available funds are accessible in order to meet redemption requests. Placing deposits payable on demand at multiple insured depository institutions, whether directly or through deposit placement services, would mitigate the risk of over-exposure to one particular insured depository institution.

Proposed § 15.11(c)(2)(v) would also require, to qualify for the safe harbor, that a permitted payment stablecoin issuer's reserve assets have a weighted average maturity of no more than 20 days. This would serve as a backstop against potential losses due to interest rate increases. While permitted payment stablecoin issuers may permissibly hold reserve assets with a maturity of up to 93 days, holding a portfolio of reserve assets concentrated at the outer end of that maturity limit exposes the issuer's reserve assets to losses due to interest rate increases.

Even small losses could undermine confidence in a stablecoin given the importance of maintaining par and ensuring a stable value. A limit on weighted average maturity imposed across the entire portfolio of a permitted payment stablecoin issuer's reserve assets would allow the issuer to hold the entire range of permissible assets while ensuring that the portfolio in aggregate does not have excess exposure to interest rate risk. A limit of 20 days would still allow permitted stablecoin issuers in the full range of permissible reserve assets (for example, newly issued 3-month Treasury bills) while ensuring that reserve assets are not overly concentrated in longer-dated issuances. The OCC invites comment on whether a weighted average maturity limit of 20 days is appropriate, including whether it would represent a binding constraint for current stablecoin issuers and the desirability of higher or lower limits. The OCC additionally invites comment on whether the weighted average maturity requirement for a large issuer should differ from that for a smaller issuer (

e.g.,

by allowing smaller issuers to have a longer weighted average maturity such as 30 or 40 days).

During the rapid increases in interest rates in the early 1980s, 3-month Treasury Bill secondary market rates increased from 12.05 percent to 15.37 percent over the period of a month.

See

Fed. Reserve Econ. Data, “Table Data—3-Month Treasury Bill Secondary Market Rate, Discount Basis,”

https://fred.stlouisfed.org/data/WTB3MS

(including Treasury Bill secondary market rates for February 8, 1980, and March 7, 1980). A change of this magnitude would result in a 90-day security losing approximately 0.79 percent of its value.

As an example, a permitted payment stablecoin issuer with $20 billion of outstanding issuance value could meet the safe harbor by placing at least $1 billion each at two insured depository institutions. This would meet the requirement in proposed § 15.11(c)(2)(i) that the permitted payment stablecoin issuer maintain at least 10 percent ($2 billion in this example) of its required reserve assets as readily available funds as well as the requirement in proposed § 15.11(c)(2)(iv) that the permitted payment stablecoin issuer maintains no more than 50 percent of its readily available funds at any one eligible financial institution ($1 billion in this example). In order to qualify for the safe harbor, the permitted payment stablecoin issuer would still need to satisfy proposed § 15.11(c)(2)(iii), under which a permitted payment stablecoin issuer could not maintain more than 40 percent of its reserve assets at any one financial institution and proposed § 15.11(c)(2)(ii), under which a permitted payment stablecoin issuer must maintain at least 30 percent of its reserve assets as deposits or insured shares payable upon demand, money standing to the credit of an account with a Federal Reserve Bank, or amounts receivable and due conditionally within five business days on pending sales of reserve assts, maturing reserve assets, or other maturing transactions. In this example, 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) and would also need to maintain at least $6 billion as deposits or shares payable upon demand, money standing to the credit of an account with a Federal Reserve Bank, or amounts receivable and due unconditionally within five business days on pending sales of reserve assets or other maturing transactions. The issuer would also need to ensure that its entire stock of reserve assets ($20 billion) complied with the requirement to have a weighted average maturity of no more than 20 days. While compliance with the diversification safe harbor would establish compliance with proposed § 15.11(c), it would not relieve a permitted payment stablecoin issuer of its obligations under proposed § 15.11(a). Notably, a permitted payment stablecoin issuer would still be required to maintain and demonstrate the operational capability to monetize its reserve assets.

Option B would impose the same quantitative standards as mandatory requirements, rather than an optional

safe harbor. Option B would not include the baseline principles-based requirement. While Option B would remove flexibility, it would create a more transparent and readily comprehensible set of requirements. Permitted payment stablecoin issuers, payment stablecoin holders, and other parties would be able to discern what requirements permitted payment stablecoin issuers must adhere to with respect to the reserve assets.

Proposed § 15.11(d) would require a permitted payment stablecoin issuer with an outstanding issuance value of $25 billion or more to, on each business day, maintain at least 0.5 percent 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. While it may not be practicable to maintain all deposits or shares as insured deposits or insured shares, having some minimum amount of insured deposits or shares will provide an additional measure of security for reserve assets and can promote market and holder confidence about the integrity of reserve assets. Though the required minimum amount is not a large percentage, it would ensure that large permitted payment stablecoin issuers have some stock of extremely safe and liquid assets: insured deposits and insured shares that can be withdrawn freely and that are not exposed to risks like interest rate risk. Having reserve assets diffused through the banking system may promote confidence by virtue of having at least some reserve assets held in traditional depository institutions with which holders are already familiar (for example, nearby community banks). Stablecoin holders may be reassured by knowing that a minimum portion of reserve assets is maintained as insured deposits, and the diffusion of reserve assets may mitigate fears or contagion risks associated with rumors about the health of particular depository institutions.

In theory, it would be ideal from the perspective of the safety and soundness of the permitted payment stablecoin issuer if permitted payment stablecoin issuers would be able to place all deposits, so they are covered by applicable deposit insurance limits. However, current deposit insurance requirements may make this impossible for larger permitted stablecoin issuers. While permitted payment stablecoin issuers may use services, such as deposit brokers, to distribute deposits across eligible financial institutions—as long as permitted payment stablecoin issuers are able to maintain the operational capability to access and monetize these deposits—the finite number of eligible financial institutions plus deposit insurance limits may render it impossible for larger permitted payment stablecoin issuers to insure more than a portion of their deposits. The OCC may revisit this issue if deposit insurance requirements change, and the OCC invites comments about alternative ways to address deposit insurance of reserve assets held as deposits. The OCC recognizes the additional security that deposit insurance would provide for stablecoin holders and also recognizes the value of spreading deposits around a broad range of depository institutions, rather than potentially having permitted payment stablecoin issuer deposits concentrated at a small number of depository institutions. Holding reserves at a very large number of institutions, could, however, introduce additional operational risk that a permitted payment stablecoin issuer would need to manage. The thresholds in proposed § 15.11(d) balance the value and security of spreading reserve assets across multiple eligible financial institutions, the capacity of the banking system to hold insured deposits from any one single depositor, and the operational complexity numerous depository relationships would entail.

Proposed § 15.11(e) would require the permitted payment stablecoin issuer to publish on its website by noon on the last day of each month the composition of the issuer's reserves held pursuant to the GENIUS Act as of noon of the last day of the prior month, using a format substantially similar to the template provided in table 1 to proposed § 15.11(e). The report must contain the total number of outstanding payment stablecoins issued by the issuer and the amount (fair value) and composition of the reserves, including the average tenor and geographic location of custody of each category of reserve instruments. The information in the report, including the value of reserve assets, should be as of the end of the previous month. This implements the requirement in section 4(a)(1)(C) of the GENIUS Act (12 U.S.C. 5903(a)(1)(C)). To satisfy the geographic location requirement, the OCC expects that it will generally be sufficient for permitted payment stablecoin issuers to disclose the jurisdiction where reserve assets are custodied or located.

Proposed § 15.11(f) implements the applicable requirements of section 4(a)(3) of the GENIUS Act (12 U.S.C. 5903(a)(3)). This provision requires permitted payment stablecoin issuers to, each month, have the information disclosed in the previous month-end report examined by a registered public accounting firm. Proposed § 15.11(f)(1) would require the examination of the previous month-end report to occur by noon on the last day of each month and would require the report to be published on the permitted payment stablecoin issuer's website at the same time as the monthly report required under proposed § 15.11(e). Consistent with the Act, proposed § 15.11(f)(2) would require the Chief Executive Officer and Chief Financial Officer (or the persons performing the equivalent functions) of the permitted payment stablecoin issuer to submit a certification as to the accuracy of the monthly report to the OCC. Under section 4(a)(3)(C) of the Act (12 U.S.C. 5903(a)(3)(C)), any person who submits this required certification knowing that such certification is false shall be subject to the same criminal penalties as those set forth under 18 U.S.C. 1350(c).

Proposed § 15.11(g) provides for the consequences and remedial measures if a permitted payment stablecoin issuer does not comply with the requirements of § 15.11. Proposed § 15.11(g)(1) would provide that a permitted payment stablecoin issuer must notify the OCC through its appropriate supervisory office on any day in which its reserve asset amount has fallen below the required minimum in proposed § 15.11(a). Proposed § 15.11(g)(2) would provide that a permitted payment stablecoin issuer falling below the required minimum 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. Proposed § 15.11(g)(3) would provide that, if a permitted payment stablecoin issuer fails to meet its reserve asset requirement for 15 consecutive business days, it must begin liquidation of reserve assets and redemption of outstanding payment stablecoins consistent with § 15.12 and may not charge customers a fee to redeem their payment stablecoins at any time during the liquidation. The OCC may extend the time period under proposed § 15.11(g)(3) in its sole discretion. Because of the importance of maintaining minimum reserve asset levels, the proposed rule would include automatic consequences for any non-compliance intended to prevent any concerns from developing further. This provision is intended to prevent chronic non-compliance with minimum reserve asset requirements. The OCC expects to ensure compliance with other

requirements in the proposed rule using traditional supervisory methods, namely having examiners identify concerns that can be escalated into enforcement actions, if necessary. Accordingly, proposed § 15.11(g)(4) provides that if at any point the OCC determines that a permitted payment stablecoin issuer has not demonstrated that it meets the reserve asset requirements in proposed § 15.11(a), (b), (c), or (d), the OCC may require the issuer to submit a plan describing how the permitted payment stablecoin issuer will attain compliance and the timeline for the plan. If the OCC determines, either before or after the submission of a plan, that a permitted payment stablecoin issuer faces a significant risk of being unable to attain compliance with the reserve requirements in proposed § 15.11 (a), (b), (c), or (d) within a reasonable period, the OCC may order the issuer to initiate redemption of all outstanding payment stablecoins. Proposed § 15.11(g)(4) also states that the OCC's authority to require a compliance plan or order redemption does not limit the OCC's authority to pursue other measures, including enforcement actions, if appropriate.

3. Redemption (Proposed § 15.12)

Section 15.12 of the proposed rule addresses redemption requirements imposed by section 4(a)(1)(B) of the GENIUS Act (12 U.S.C. 5903(a)(1)(B)). Consistent with the statute, under proposed § 15.12(a), a permitted payment stablecoin issuer must publicly disclose its redemption policy.

The OCC proposes that in disclosing its redemption policy, the issuer must include, at a minimum, certain information. Specifically, proposed § 15.12(a)(1) provides that the issuer must include a timeframe in which the issuer will redeem payment stablecoins and the timeframe under which the issuer is required to redeem payment stablecoins (which, under proposed paragraph § 15.12(b)(1)(i) may not exceed two business days following the date of the requested redemption). In proposed § 15.12(a)(2), the OCC proposes to require the issuer to include a statement consistent with proposed § 15.12(b)(1)(ii) that any discretionary limitations on timely redemptions can only be imposed by the OCC, or in the case of a State qualified payment stablecoin issuer, by the OCC, Federal Reserve, or the State payment stablecoin regulator, as applicable. Proposed § 15.12(a)(3) requires that issuers include in their redemption disclosures a statement explaining the scenarios when the redemption period may be extended as provided for in proposed § 15.12(c). Proposed § 15.12(a)(4) provides that the issuer must provide a statement with clear instructions on how a payment stablecoin holder can redeem a payment stablecoin, including a link to the website(s) where a customer can redeem the payment stablecoin. Proposed § 15.12(a)(5) would require the issuer to specify the minimum number of payment stablecoins, if any, that the permitted payment stablecoin issuer will redeem, provided that the issuer must redeem any number greater than or equal to one payment stablecoin, subject to appropriate customer screening and onboarding. In setting the requirement that a permitted payment stablecoin issuer must redeem any number greater than or equal to one payment stablecoin, the OCC is relying on a natural reading of the definition of “payment stablecoin.” Specifically, section 2(22) of the GENIUS Act (12 U.S.C. 5901(22)), defines “payment stablecoin” as a digital asset that an issuer “is obligated to convert, redeem, or repurchase for a fixed amount of monetary value.” Since “payment stablecoin” is singular, the statutory language suggests that while an issuer could set a minimum redemption threshold at a fraction of a payment stablecoin, an issuer must redeem any number greater than or equal to one payment stablecoin to comply with the GENIUS Act. Otherwise, the payment stablecoin would not be redeemable for a fixed amount of monetary value.

Under section 2(22) of the GENIUS Act (12 U.S.C. 5901(22)), the issuer of a payment stablecoin must be obligated to convert, redeem, or repurchase a payment stablecoin for a fixed amount of monetary value, not including a digital asset denominated in a fixed amount of monetary value.

Proposed § 15.12(b)(1) provides that an issuer's redemption policy must provide clear and conspicuous procedures for timely redemption of outstanding payment stablecoins. In proposed § 15.12(b)(1)(i), the OCC is proposing to define “timely” to mean that the permitted payment stablecoin issuer would have to redeem a payment stablecoin no later than two business days following the date of the requested redemption. The OCC is proposing this two-business day timeframe as an outer limit on when a permitted payment stablecoin issuer must redeem a payment stablecoin and understands that many issuers may choose a timeframe that is less than two business days. The OCC believes this timeframe provides sufficient responsiveness to stablecoin holders who seek to redeem their stablecoins, while also ensuring that issuers can appropriately manage liquidity demands. Proposed § 15.12(b)(1)(ii), consistent with the statute, provides that discretionary limitations on timely redemptions can only be imposed by the OCC or, in the case of a State qualified payment stablecoin issuer, by the OCC, the Federal Reserve, or the State payment stablecoin regulator, as applicable.

Proposed § 15.12(c)(1) would provide that the period for timely redemption is extended to seven calendar days if a permitted payment stablecoin issuer faces redemption demands in excess of 10 percent of its outstanding issuance value in a single 24-hour period. The OCC proposes to use a 24-hour period for this requirement in recognition of the likelihood that there may be significant demands to redeem payment stablecoins outside of normal business hours and outside of the hours when many reserve assets could be liquidated. As provided for in proposed § 15.12(c)(2), the extended redemption period applies to all redemption requests that are outstanding at the time the 10 percent threshold is met as well as any subsequent redemption requests following the time the threshold is met. Proposed § 15.12(c)(3) clarifies that the extension is non-discretionary and that a permitted payment stablecoin issuer may only redeem any of the outstanding or subsequent redemption requests prior to the seven calendar day period if the OCC determines that the issuer has the ability to redeem sooner in an orderly fashion and through a fair and transparent process or the OCC otherwise provides notice to the permitted payment stablecoin issuer that the extended redemption period no longer applies. The OCC expects that the permitted payment stablecoin issuer seeking to redeem sooner than the seven calendar day period will engage with the OCC through the issuer's supervisory office to provide evidence that it can redeem in an orderly fashion and through a fair and transparent process that does not unfairly advantage some payment stablecoin holders relative to other payment stablecoin holders. Under proposed § 15.12(c)(4), a permitted payment stablecoin issuer that exceeds that 10 percent threshold would be required to provide notice to the OCC through its supervisory office within 24 hours. Using this 24-hour time period will provide appropriate notice to the OCC and allow an appropriate amount of time to facilitate the orderly liquidation of reserve assets. These provisions are intended to facilitate the orderly liquidation of sufficient reserve assets in the event of a spike in redemption requests and

would help ensure financial stability by lowering the potential price impact of a sudden liquidation of reserve assets. Proposed § 15.12(c)(5) provides that the OCC, may in its discretion, extend timely redemption described in proposed § 15.12(b)(1) or (c)(1), as applicable, if the OCC determines that the permitted payment stablecoin issuer poses a threat to safety and soundness, financial stability, or such an extension is otherwise in the public interest.

The requirements of this section apply only to the redemption of a payment stablecoin by the permitted payment stablecoin issuer (and any entity acting on behalf of the permitted payment stablecoin issuer) and would not apply to secondary market trading. This section is not intended to prevent permitted payment stablecoin issuers from establishing criteria related to the participants with which permitted payment stablecoin issuers will interact.

Proposed § 15.12(d)(1) provides that a permitted payment stablecoin issuer must also publicly, clearly, and conspicuously disclose in plain language and in format that is readily noticeable to customers, readily understandable by customers, and segregated from other information: (i) the name of the permitted payment stablecoin issuer that issues the payment stablecoin; (ii) that the permitted payment stablecoin issuer is the entity that is obligated to convert, redeem, or repurchase the payment stablecoin for a fixed amount of monetary value; (iii) the link to the monthly composition report of the relevant permitted payment stablecoin issuer's reserves as required under proposed § 15.11(e); and (iv) all fees associated with purchasing or redeeming payment stablecoins. The OCC is including a requirement that the disclosures under proposed § 15.12(d)(1) are readily noticeable by customers, readily understandable by customers, and segregated from other information to provide more certainty on what it means to “publicly, clearly, and conspicuously disclose [the information] in plain language.”

The OCC is proposing to include the requirement that the disclosures be segregated from other information to ensure that the information in the disclosures is not combined with other non-relevant information that could obscure the importance of these disclosures. Although the permitted payment stablecoin issuer may include additional information beyond what is required in proposed § 15.12(d)(1) in the same disclosure, the information required under proposed § 15.12(d)(1) should be sufficiently separate and must meet the other requirements outlined, including that the information is readily noticeable and readily understandable by customers. The OCC believes that the disclosures required under proposed § 15.11(d)(1) are consistent with section 4(a)(1)(B) of the GENIUS Act (12 U.S.C. 5903(a)(1)(B)) and are particularly important in the situation where a permitted payment stablecoin issuer issues more than one brand of payment stablecoin either directly or through an affiliate (if the OCC limits permitted payment stablecoin issuers to issuing a single brand of payment stablecoin). The OCC believes that these disclosures are necessary to prevent confusion and ensure that payment stablecoin holders understand who has the ultimate obligation to redeem their payment stablecoin.

12 U.S.C. 5903(a)(1)(B)(ii).

Proposed § 15.12(d)(2) provides that an issuer must update the disclosures in proposed § 15.12(d)(1)(iv) if there are any changes in the fees associated with purchasing or redeeming stablecoins and provide customers at least seven calendar days' prior notice of the change, including by securely delivering the notice to current customers. Proposed § 15.12(d)(3) provides that a permitted payment stablecoin issuer must publish the disclosures in proposed § 15.12(d)(1) and any updates made in accordance with proposed § 15.12(d)(2) on the permitted payment stablecoin issuer's website. Proposed § 15.12(d)(4) provides that a permitted payment stablecoin issuer must include the disclosures in proposed § 15.12(d)(1) and any updates made in accordance with proposed § 15.12(d)(2) in any customer agreements that it provides.

4. Risk Management (Proposed § 15.13)

Section 4(a)(4)(A)(iv) of the GENIUS Act (12 U.S.C. 5903(a)(4)(A)(iv)) provides that the OCC must issue regulations implementing appropriate operational, compliance, and information technology risk management principles-based requirements and standards that are tailored to the business model and risk profile of permitted payment stablecoin issuers and are consistent with applicable law. This provision also requires that Bank Secrecy Act and sanctions compliance standards be implemented. The Bank Secrecy Act and sanctions compliance requirements will be addressed in a different proposed rule. Proposed § 15.13 addresses the remaining requirements and standards required under section 4(a)(4)(A)(iv) of the GENIUS Act. Proposed § 15.13 also addresses interest rate risk management standards under section 4(a)(4)(A)(iii) of the GENIUS Act (12 U.S.C. 5903(a)(4)(A)(iii)).

The GENIUS Act requires that the regulation's requirements and standards be “principles-based.” Accordingly, the OCC is proposing flexible standards in § 15.13 that scale based on the nature, scope, and risk of a permitted payment stablecoin issuer's activities. Most of the standards in proposed § 15.13 are adapted from relevant provisions of 12 CFR part 30, appendices A and B, which in turn implement 12 U.S.C. 1831p-1.

The OCC identified standards from appendices A and B of part 30 that fit the requirements of section 4(a)(4)(A)(iii) or 4(a)(4)(A)(iv) of the GENIUS Act and then, consistent with the statute, adapted and tailored those standards to the business models of permitted payment stablecoin issuers, as appropriate. In addition, on July 14, 2025, the OCC issued a joint statement, together with the Federal Reserve and FDIC, on Risk Management Considerations for Crypto-Asset Safekeeping,

and the standards in proposed § 15.13 are consistent with the considerations described in the joint statement.

While the standards listed in 12 U.S.C. 1831p-1 provide a useful reference point for standards that may be applicable to permitted payment stablecoin issuers, the OCC is not invoking 12 U.S.C. 1831p-1 as a source of authority for issuing these risk management requirements. Accordingly, the specific requirements for violating 12 U.S.C. 1831p-1 would not necessarily apply to permitted payment stablecoin issuers (

e.g.,

a mandatory plan).

See

OCC, “Agencies Issue Joint Statement on Risk-Management Considerations For Crypto-Asset Safekeeping” (July 14, 2025),

https://www.occ.gov/news-issuances/news-releases/2025/nr-ia-2025-68.html.

Consistent with the recommendations in the Digital Financial Technology Report, the OCC intends to provide additional clarity with respect to digital asset activities undertaken by OCC-supervised entities.

Proposed § 15.13(a)(1) requires that a permitted payment stablecoin issuer have internal controls and information systems that are appropriate for the size and complexity of the permitted payment stablecoin issuer and the nature, scope, and risk of its activities and that provide for: (i) an organizational structure with appropriate segregation of duties and an internal control structure that establishes clear lines of authority and responsibility for monitoring adherence to established policies; (ii) effective risk assessment; (iii) timely and accurate financial, operational, and regulatory reporting, including with respect to reports required under proposed part 15; (iv) adequate procedures to safeguard, manage, control, and monetize assets, including reserve

assets; and (v) compliance with applicable laws and regulations. Internal controls refer to the systems, policies, procedures, and processes effected by the board of directors and other personnel to safeguard permitted payment stablecoin issuer assets, limit or control risks, achieve permitted payment stablecoin issuer objectives, and ensure compliance with applicable laws and regulations. Effective internal controls help the board of directors and management safeguard the permitted payment stablecoin issuer's resources and comply with laws and regulations, as well as reduce the possibility of significant errors and irregularities, and assist in their timely detection when errors and irregularities do occur. Internal controls must also include an effective risk assessment since a permitted payment stablecoin issuer cannot effectively manage its risks without an understanding of its risk profile. The internal controls standards in proposed § 15.13(a)(1) are modeled on the internal controls standards in 12 CFR part 30, with some adjustments to accommodate the particular activities and risks of permitted payment stablecoin issuers. For example, the procedures to safeguard, manage, control, and monetize assets will be expected to include measures to monitor and ensure the deposit concentration and diversification requirements are met on a daily basis.

Likewise, procedures will be expected to address potential vulnerabilities related to fraud and the theft of payment stablecoins or other assets.

In spring 2023, interest rate increases contributed to the failure of Silicon Valley Bank, which in turn caused the value of one stablecoin, USDC, to fall below $1 in the secondary market when it became evident that much of USDC's reserves were held at Silicon Valley Bank. This event illustrates the potential knock-on effects of changes in interest rates and the importance of continuous monitoring for stablecoins, particularly if acute stress creates situations where issuers are unable to access reserve assets.

The OCC proposes that

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