OCC Finalizes First GENIUS Act Stablecoin Rule, Effective Jan. 18

The first final federal rule under the GENIUS Act is now on the books. The Office of the Comptroller of the Currency published its final rule implementing the stablecoin law on Wednesday, making it the first regulator to finish its portion of the work. The rule takes effect Jan. 18, 2027.

The rule creates a framework for permitted stablecoin issuers, with separate pathways for banks and non-bank companies to conduct payment stablecoin activities. It also sets standards for issuers based outside the U.S. and for the custody of assets.

"Today's final rule advances President Trump and Secretary Bessent's vision for American leadership in digital assets"

Jonathan Gould, Comptroller of the Currency

Treasury Secretary Scott Bessent said the rule "carries that landmark legislation forward, providing a clear, practical foundation for private-sector innovation, competition, and American leadership in digital assets."

Rewards: no safe harbor, no examples

The most consequential change concerns stablecoin rewards. The final rule drops a proposed presumption that certain arrangements with third parties could be unlawful. According to a regulatory official who briefed reporters, the proposed language estimated whether evasion would be likely rather than reflecting a "nascent market." In its place, the OCC will review rewards arrangements case by case.

That does not mean the agency has stepped back. The official said issuers' relationships with third parties must not violate the statutory prohibition, adding:

"we do have authority to enforce against evasions of the act"

OCC regulatory official, speaking to reporters

The rule document also states that the OCC "declines to presume that rewards programs that predated the GENIUS Act comply with the GENIUS Act." Existing programs therefore get no grandfathering, and the rule offers no examples of which rewards would breach the ban.

The agency did signal how it reads the statute. It suggested the word "solely" in the prohibition carries significant weight, so a reward that "might be made, at least in part, for other reasons" would fall outside the ban. Programs already in the market include PayPal's 4% on PYUSD, Coinbase One's 3.75% on USDC and Kraken+'s rewards of up to 4.5% on USDG.

Reserves and the Clarity Act

On reserves, the OCC moved from its proposal to a "principles-based approach with respect to reserve asset diversification and concentration requirements."

Some commenters argued the Clarity Act could still overhaul the GENIUS framework on yield. The OCC declined to wait:

"Unless and until such legislation passes, the OCC must implement the GENIUS Act's yield prohibition, as enacted."

OCC, final rule

That legislation is stalled. The full Senate failed to advance the Clarity Act in a procedural vote in September, without unanimous Republican support, as banks pushed for changes on yield. Banks argue that rewards could pull deposits away from community institutions.

What it means for the market

The OCC's rule is one piece of a multi-agency build-out. The FDIC issued application standards late last year and proposed an approach for state-chartered institutions in April. Treasury proposed its approach in August, FinCEN and OFAC issued a joint proposal in April, and the Federal Reserve issued proposals last month. No regulator met the act's mid-year deadline, and it appears unlikely that all required rules will be in place before the act's overall effective date in January.

For issuers under OCC supervision, the practical result is a firm start date but continued ambiguity on yield. Without a safe harbor or worked examples, issuers and their distribution partners will have to defend each rewards arrangement on its own terms.

The rule also lands as the OCC's crypto chartering activity draws scrutiny, from its conditional approval of a national trust bank charter for World Liberty to a banking group's lawsuit challenging its crypto trust charter authority.