OCC Proposes Bank-Style Stablecoin Rules Under GENIUS Act

Overview

• The notice of proposed rulemaking establishes a licensing process for permitted issuers, with applications automatically deemed approved if the OCC does not decide within 120 days after the filing is judged complete.
• Issuers must hold identifiable 1:1 reserves in specified liquid assets, including U.S. currency, demand deposits, short‑dated Treasuries, reverse repos, qualifying money market funds, and certain tokenized equivalents.
• Redemptions at par must be completed within two business days, extendable to seven calendar days if outflows exceed 10% of outstanding tokens in 24 hours, with required notification to the OCC within 24 hours of the trigger.
• Paying holders interest or yield is prohibited, with a rebuttable presumption that affiliate or third‑party arrangements that deliver rewards to holders constitute banned yield.
• Comments are due 60 days after Federal Register publication, BSA/AML/OFAC obligations will be handled in a separate Treasury‑coordinated rulemaking, and implementation is targeted no later than January 18, 2027 or earlier after final rules.