On March 2, 2026, the Office of the Comptroller of the Currency (OCC) dropped a 370-page proposed rule in the Federal Register. It is the most detailed picture yet of how the U.S. government intends to regulate stablecoins. The public comment window closes May 1. Final rules are due by July 18, 2026.

The GENIUS Act, signed into law on July 18, 2025, established the legal framework. The OCC’s Notice of Proposed Rulemaking (NPRM) is how that framework becomes operational. Here is what the rule actually says.

Who It Covers

The OCC’s rule targets a wider set of actors than most people realize. It applies to:

  • National banks and their subsidiaries issuing payment stablecoins
  • Federal savings associations
  • Nonbank entities seeking a federal license as a “permitted payment stablecoin issuer” (PPSI)
  • Foreign stablecoin issuers with U.S. customers
  • State-chartered issuers that exceed $10 billion in outstanding issuance (they must transition to federal supervision within 360 days or stop net new issuance)

That last point is significant. Tether and Circle, both of which have historically operated under state-level or offshore regimes, fall squarely in the OCC’s crosshairs once their issuance exceeds the threshold. Tether’s USDT market cap is well above $140 billion. Circle’s USDC is above $60 billion.

The Reserve and Redemption Rules

The core requirement is 1:1 reserve backing with liquid assets. Permissible assets include U.S. currency, demand deposits, Treasuries maturing in 93 days or less, qualifying money market funds, and tokenized versions of certain eligible assets.

Redemption must happen at par within two business days of a valid request. There is a safety valve: if redemption requests exceed 10% of outstanding issuance within any rolling 24-hour window, the issuer gets seven calendar days. They must notify the OCC within 24 hours of crossing that threshold.

Yield is explicitly banned. Issuers cannot pay interest, yield, or rewards on payment stablecoins. The rule applies a rebuttable presumption to white-label arrangements and affiliate relationships, meaning issuers cannot route yield to users through a third-party wrapper.

The Licensing Process

Prospective PPSIs must submit a full application covering business model, governance, reserve management, technology infrastructure, and risk controls. Applications are deemed approved 120 days after receipt unless the OCC denies them. Denials can be appealed within 30 days.

Ongoing requirements include annual full-scope examinations and quarterly Call Report-style filings. Foreign issuers face monthly reporting on reserve composition and U.S. customer exposure.

What the Rule Does Not Cover

The OCC explicitly carved out Bank Secrecy Act, anti-money laundering, and OFAC sanctions compliance. Those will come in a separate rulemaking coordinated with the Treasury Department. The rule also does not address algorithmic stablecoins, which remain in a legal grey zone.

The Federal Reserve and Treasury are expected to issue their own proposed rules before the July 2026 deadline.

What Changes for the Market

For large issuers already operating at scale, the most immediate pressure is the $10 billion threshold. Crossing it triggers a mandatory transition to federal supervision, a more intrusive and expensive regime than most current state licenses.

For new entrants, the 120-day application clock with a presumption of approval is actually relatively streamlined compared to a full bank charter. That may encourage fintech companies and banks to launch payment stablecoin products once the rule is final.

The yield ban is a significant constraint on business models. Several newer stablecoin projects have built their value proposition around on-chain yield distribution. Under the GENIUS Act framework, those products cannot be classified as payment stablecoins, which limits their distribution and use in regulated contexts.

The Stakes

Total stablecoin supply across all chains crossed $315 billion in early 2026. Payment stablecoins are increasingly embedded in cross-border payments, corporate treasury management, and on-chain financial infrastructure. The OCC’s rule will determine who gets to operate in the U.S. market and under what conditions.

The comment period runs through May 1. Industry groups, crypto companies, and banks are all expected to submit detailed responses. Final rules must be issued by July 18, 2026, with the GENIUS Act taking effect no later than January 18, 2027, or 120 days after regulators finalize implementing rules, whichever comes first.

The rulemaking phase is the part where law becomes business reality. For stablecoin issuers, the next four months are the ones that matter.