The U.S. Office of the Comptroller of the Currency published proposed stablecoin rules on February 25, 2026. The comment period runs through May 1. What the OCC is proposing is not a light-touch framework. It is a detailed operational regime that will require significant changes from every major stablecoin issuer operating in the United States.

The GENIUS Act, which became law in July 2025, created the legislative authority for these rules. The OCC is now filling in the details.

The $10 billion threshold

The most consequential provision in the OCC’s proposal is a size-based trigger: any stablecoin issuer regulated at the state level that exceeds $10 billion in outstanding stablecoins must either obtain federal supervision or stop issuing new coins within 360 days.

This is directed, without naming names, at Circle and Tether. Circle’s USDC has a market cap of roughly $60 billion. Tether’s USDT is the largest stablecoin by far, with more than $140 billion outstanding , though Tether is incorporated offshore and the jurisdictional question is more complex.

For Circle, which has long sought a banking charter and positioned itself as the compliance-friendly stablecoin issuer, the federal pathway may be the intended destination anyway. The OCC rules effectively formalise that path and create a deadline.

For Tether, the question is whether U.S. regulators have the reach to enforce the $10 billion threshold against an issuer that does not have a U.S. banking licence and whose primary operations are outside American jurisdiction. The OCC’s proposal does not fully resolve this question, and legal challenges are likely if enforcement actions follow.

Reserve requirements

The OCC’s proposed reserve framework is stricter than what most stablecoin issuers currently disclose.

Eligible reserve assets under the proposal include: U.S. cash, deposits at FDIC-insured banks, U.S. Treasury securities with maturities under 93 days, and qualifying money market funds that themselves hold only Treasuries and government repos.

Corporate bonds, longer-dated Treasuries, and non-Treasury government debt are excluded. Tether has historically held a portion of its reserves in corporate paper, precious metals, and Bitcoin. Under the OCC’s framework, none of those would count toward the 1:1 backing requirement.

Circle’s USDC reserves are already heavily weighted toward short-duration Treasuries and cash equivalents. The proposed rules would require limited changes from Circle compared to Tether.

Two-business-day redemption

The proposal mandates that federally supervised stablecoin issuers honour redemption requests within two business days.

This is a meaningful operational requirement. It means issuers must maintain sufficient liquidity in eligible assets to meet redemptions within that window, including during stress periods. A 2022-style event, in which a stablecoin issuer faced large simultaneous redemptions, would require the issuer to liquidate short-duration Treasuries quickly.

At current Treasury market liquidity, this is manageable for most issuers. At larger scale, or during a broader market stress event, it introduces execution risk.

What happens to algorithmic stablecoins

The GENIUS Act, and by extension the OCC’s proposal, explicitly excludes algorithmic stablecoins from the federal payment stablecoin framework. An issuer cannot satisfy the 1:1 reserve requirement with on-chain assets, governance tokens, or synthetic backing mechanisms.

This effectively bars a Luna-style algorithmic stablecoin from the regulated framework. It also creates uncertainty around hybrid models, such as stablecoins that use crypto as collateral but maintain over-collateralisation ratios to simulate 1:1 backing. The OCC’s proposed rules do not address these explicitly. The May 1 comment period is the appropriate moment for issuers with hybrid models to engage with the agency.

What this means in practice

For users of USDC and USDT, the near-term impact is limited. Neither issuer is being shut down, and the 360-day transition window for state-regulated issuers above $10 billion gives time for compliance planning.

The medium-term effect is consolidation. Compliance with the OCC’s framework will require legal infrastructure, regular audits by qualified firms, and liquidity management systems that smaller state-chartered issuers may not be able to sustain. The result is likely to be a smaller number of larger, federally regulated issuers that operate like narrow banks.

That is, broadly, what U.S. banking regulators have wanted since stablecoins first became significant. They got it. The GENIUS Act passed, the rules are coming, and the era of stablecoin issuers operating in a grey area of financial regulation is ending.

The question for the next 12 months is whether the transition happens smoothly, with issuers adapting, or abruptly, with enforcement actions against issuers that do not move fast enough. Watch the OCC’s comment period responses and any signals from Tether about whether it intends to seek U.S. regulatory status.