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On February 25, 2026, the Office of the Comptroller of the Currency (OCC) issued a Notice of Proposed Rulemaking to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) governing payment stablecoin issuance and related activities by entities subject to OCC oversight (previously discussed here and here).
The proposal would build a federal supervisory framework around “payment stablecoins” (i.e., tokens designed for payment or settlement and redeemable at a fixed amount of monetary value). The rule text reflects a prudential approach to payment stablecoin oversight, centered on reserve integrity, redemption mechanics, governance, and operational resilience. The proposed rulemaking provides additional detail on several key components of the GENIUS Act:
- “Yield” Prohibition. The proposal operationalizes the GENIUS Act's prohibition on paying stablecoin “interest” or “yield” to holders solely in connection with holding stablecoins. While the GENIUS Act prohibits stablecoin issuers from paying interest or yield directly to stablecoin holders, it does not expressly bar an issuer's affiliates or “related third parties” from offering yield funded indirectly by the issuer—a detail that has recently sparked heated industry and congressional debate (previously discussed here). The rulemaking proposes a rebuttable presumption that such arrangements violate the GENIUS Act's prohibition on yield payouts.
- Redemption Mechanics. A core feature is the proposed redemption mechanism, by which holders of stablecoins may redeem their stablecoins with stablecoin issuers. A stablecoin issuer must honor a holder's redemption request (turn stablecoins back into dollars, at par) no later than 2 business days after the request. However, to address bank-run-like scenarios, the proposal includes an automatic extension: if, during any 24-hour period, an issuer receives redemption requests exceeding 10% of the total value of its outstanding stablecoins, the issuer may take up to 7 calendar days to pay out the redemption requests to holders.
- $5 Million Capital Floor for Newly Approved Issuers. The proposal also makes clear that the full 1:1 reserve backing requirement is not the only financial safeguard expected of payment stablecoin issuers. In addition to maintaining high-quality reserve assets, newly approved issuers would be subject to a de novo capital framework, including a proposed $5 million minimum capital floor during the early supervisory period. The requirement is intended to ensure proposed payment stablecoin issuers have sufficient resources to cover losses that may occur during the startup phase.
- BSA/AML Compliance as a Condition of Authorization. The proposal also links BSA/AML compliance governance directly to licensing status. Permitted payment stablecoin issuers would be required to provide a board-level certification confirming that the issuer maintains anti-money laundering compliance structures consistent with applicable law. Failure to submit a satisfactory certification may lead to revocation of authorization to issue stablecoins.
Putting It Into Practice: Taken together, the proposal shows that the OCC intends to treat payment stablecoin issuance as a closely supervised financial activity rather than a light-touch, tech-driven product. The agency is focused on clear guardrails around yield, fast but realistic redemption rights, real capital at risk, and board-level accountability for compliance. Market participants considering entering the space should view this rulemaking as a signal: stablecoin issuance under the GENIUS Act will require strong operational controls, meaningful financial resources, and governance structures that can withstand ongoing regulatory scrutiny.
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