OCC Opens GENIUS Act Stablecoin Rulemaking, Proposes Bank-Led, Fully Reserved Framework

The Office of the Comptroller of the Currency (OCC) has opened a 60-day public comment period for draft rules implementing the GENIUS Act, and extended interagency deadlines to align supervision. The proposal would centralise issuance of payment stablecoins with permitted issuers (national trust banks, certain federal/state-qualified issuers and foreign entrants seeking U.S. access), require full-reserve backing, set reserve-asset standards, mandate redemption at par, and impose capital, liquidity, custody, audit and governance requirements. The OCC would gain supervisory authority over national bank subsidiaries, qualified issuers, and foreign stablecoin firms operating in the U.S.; AML and sanctions rules remain coordinated with the Department of the Treasury and FDIC but are not included in this package. The regime could become effective by January 2027 or as soon as 120 days after final rules, depending on rulemaking speed. Industry reaction is mixed: supporters say tighter banking oversight and clear national standards will reduce fragmentation and encourage regulated issuance by banks, payments firms and crypto firms; critics warn of higher compliance costs and operational complexity. For traders, the proposal reduces regulatory uncertainty for dollar-backed payment stablecoins, likely favouring regulated, bank-issued stablecoins and possibly narrowing the competitive field. Key trading implications: potential reallocation of liquidity toward bank-backed stablecoins, reduced redemption-run risk for fully reserved tokens, but transitional volatility as firms adapt compliance and licensing.