OCC and Treasury Department Issue Requests for Comments on GENIUS Act Proposed Implementation Rulemakings
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act or Act) was signed into law in July 2025, establishing a regulatory framework for payment stablecoins and their issuers. As part of the Act's implementation process, the Act explicitly directed federal and state regulatory agencies to issue regulations on several topics, including reserve requirements, application processing, and standards for state-level regulatory regimes.
In accordance with this direction, the Office of the Comptroller of the Currency (OCC) and the Department of the Treasury both recently issued Notices of Proposed Rulemakings to implement various provisions of the GENIUS Act.
OCC Notice of Proposed Rulemaking
On March 2, the OCC issued a Notice of Proposed Rulemaking (the OCC Proposed Rule) to implement the GENIUS Act for the issuance of stablecoins by entities subject to OCC jurisdiction. The OCC Proposed Rule addresses all of the regulatory topics that the OCC is required to promulgate under the GENIUS Act, except for those related to the Bank Secrecy Act, Anti-Money Laundering, and Office of Foreign Asset Control sanctions, which will be addressed in a separate rulemaking in conjunction with the Treasury Department. Comments on the OCC Proposed Rule were due May 1, 2026.
The OCC Proposed Rule generally sets forth the regulations that would apply to permitted payment stablecoin issuers (PPSIs) and foreign payment stablecoin issuers under the OCC's jurisdiction. Certain custody activities are also addressed, as well as the transition requirements for nonbank state qualified payment stablecoin issuers with over $10 billion in outstanding issuance value seeking to transition to a federal regulatory framework. The OCC Proposed Rule also specifies the only permitted activities that PPSIs are authorized to perform.
Reserve requirements are also addressed, including diversity requirements and specifying permissible assets for stablecoin backing. The OCC Proposed Rule also provides a template for issuers to use when publishing the monthly composition of their reserves, as required by the GENIUS Act and restated in the OCC Proposed Rule.
Notably, the OCC Proposed Rule creates a rebuttable presumption that a PPSI is in fact paying interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use or retention of such payment stablecoin if the PPSI has defined commercial relationships with affiliates or related third parties. As a reminder, the GENIUS Act prohibits PPSIs and foreign payment stablecoin issuers from paying the holder of any payment stablecoin any form of interest or yield solely in connection with the holding, use or retention of such payment stablecoin, and the OCC's Proposed Rule would incorporate and implement that prohibition.
The OCC sought comments on all aspects of the OCC Proposed Rule, including:
- Whether the OCC should clarify the scope of the term "digital asset service provider" used in the GENIUS Act.
- Whether there are activities that PPSIs must be able to engage in for purposes of the GENIUS Act that the OCC Proposed Rule would prohibit.
- Whether there are other limits or conditions the OCC should consider with respect to payment stablecoin issuers acting as principal or agent with respect to any stablecoin.
- Whether the presumption with respect to the prohibition against paying interest or yield solely in connection with the holding, use, or retention of a permitted payment stablecoin is appropriately scoped.
- Whether the OCC Proposed Rule, or specifically its reserve diversification requirements that encourage diffusion of deposits, causes risk to the banking system.
- Whether requiring redemption of stablecoins to occur within two business days is appropriately timely.
Treasury Department Notice of Proposed Rulemaking
On April 3, the Treasury Department issued a Notice of Proposed Rulemaking (the Treasury Proposed Rule) to implement Section 4(c) of the GENIUS Act, which permits a "State qualified payment stablecoin issuer" (SQPSI) with less than $10 billion in consolidated total outstanding issuance to opt for regulation under a state-level regulatory regime that is "substantially similar" to the federal regulatory framework under the GENIUS Act. The Treasury Proposed Rule proposes broad-based principles for determining when a state-level regulatory regime is "substantially similar" to the federal regime. Comments on the Treasury Proposed Rule were due June 2, 2026.
The Treasury Proposed Rule defines "state-level regulatory regime" to include all statutes, regulations, and guidance regarding payment stablecoins. Notably, the guidance is limited to only those that are enforceable against SQPSI.
The Treasury Proposed Rule then sets forth the following general broad-based principles that would constitute a state-level regulatory regime that is "substantially similar" to the federal framework:
- It meets or exceeds the standards in Section 4(a) of the GENIUS Act, so that the implementation of the state regime is consistent with the federal framework.
- It includes frameworks for transition to federal oversight, custody, and insolvency that are consistent with the applicable provisions in the GENIUS Act.
The Treasury Proposed Rule also provides additional broad-based principles for the "uniform" and "state-calibrated" requirements under Section 4(a) of the GENIUS Act, as well as principles for other provisions of the Act. In particular, the "state-calibrated" principles address the standards for, among others, reserve assets, redemption, rehypothecation, liquidity, and IT risk management.
The Treasury Department sought comments on, among other things:
- Whether the definition of "state-level regulatory regime" should include foreign payment stablecoin issuers.
- Whether the broad-based principles should be amended to add or remove principles.
- Whether it is appropriate to distinguish between uniform and state-calibrated requirements of Section 4(a) of the Act.
- Whether any other federal laws that apply to SQPSA should be considered with a substantially similar analysis.
- Whether the proposed standard for meeting or exceeding the requirements are appropriate and clear?
Stinson attorneys are monitoring all aspects of the GENIUS Act, related rulemakings from the OCC, Treasury Department, and other agencies, and state-level stablecoin issuance laws and regulations. For more information, contact Heidi Wicker, Audrey Carroll, Matthew Grimaldi, Marisa Perfetti or the Stinson LLP contact with whom you regularly work.
