The Office of the Comptroller of the Currency has issued a Notice of Proposed Rulemaking concerning the implementation of regulations under the Guiding and Establishing National Innovation for U.S. Stablecoins (“GENIUS”) Act. The proposal contemplates the creation of a federal regulatory framework that would replace the current state-based patchwork. As proposed, the regulations would apply to domestic permitted payment stablecoin issuers (“PPSIs”) under OCC oversight, certain state-chartered PPSIs, and foreign PPSIs.
Under the two-tier framework, PPSIs that are federally chartered or subsidiaries of national banks or federal savings associations would be subject to OCC licensing requirements and regulation. State-chartered PPSIs with $10 billion or more in outstanding payment stablecoin issuance would transition to OCC regulation or be prohibited from issuing until their issuance level fell below the $10 billion threshold. Foreign PPSIs must register with the OCC and be subject to a comparable regulatory regime in their home country.
The proposed rule touches on many aspects of stablecoin activity from issuance, reserves, and redemption, to supervision and examination. The GENIUS Act prohibits PPSIs (but not expressly partners or affiliates) from offering interest or yield on stablecoins. Proposed §15.10(c)(4) establishes a rebuttable presumption that arrangements with third-party partners or affiliates that resemble interest or yield are in violation of the prohibition. However, certain profit-sharing arrangements could be permitted between PPSIs and merchants or other partners for whom they issue white-label stablecoins. The effective date of the GENIUS Act is the earlier of January 18, 2027, or the date that is 120 days after the date on which the federal banking regulators issue implementing regulations. Other federal banking agencies including the FDIC and FRB are expected to publish proposed regulations in the near future. The OCC will jointly issue proposed regulations concerning the Bank Secrecy Act, anti-money laundering, and OFAC sanctions with the Department of Treasury.
