A significant development has emerged in the U.S. regulatory framework for stablecoins. On October 21, the Office of the Comptroller of the Currency (OCC) announced the final implementing rule for the GENIUS Act, establishing regulatory standards for payment stablecoin issuers’ reserve assets, redemption mechanisms, risk management, and asset custody activities. The OCC confirmed that the Act and the final implementing rule within its jurisdiction will take effect on January 18, 2027. However, the final version removes the provision that would have presumed third-party stablecoin yield arrangements to be violations, prompting differing reactions from the U.S. banking and cryptocurrency industries.
OCC Publishes Final Implementation Rules, Clarifying Requirements for Stablecoin Issuance
The GENIUS Act was signed into law by U.S. President Donald Trump on July 18, 2025, establishing a federal regulatory framework for U.S. dollar payment stablecoins. Following the release of proposed implementation rules and a public comment period in February this year, the OCC has finalized the implementation rules within the scope of its regulatory authority.
According to the OCC announcement, the new rules apply to national banks, federal savings associations and their subsidiaries, nonbank payment stablecoin issuers with federal authorization, and certain foreign issuers. Some eligible state-regulated issuers must also comply with the relevant requirements if they fall under the OCC’s supervisory or enforcement authority.
Specific requirements include holding sufficient reserve assets to back payment stablecoins in circulation, and establishing clear redemption procedures, risk management, financial reporting, auditing, and capital management systems. In general, issuers must complete redemption within two business days of receiving a valid redemption request.
OCC Comptroller Jonathan Gould said the final implementation rules will establish clear standards for reserve assets, redemption, and risk management for payment stablecoins, while drawing on existing regulatory experience to support the industry’s development.
Third-Party Stablecoin Yield Restrictions Adjusted as OCC Removes Presumption of Violation
The most closely watched change in these final implementation rules is the OCC’s adjusted approach to regulating third-party stablecoin yield arrangements.
Under the GENIUS Act, payment stablecoin issuers may not pay interest or yield directly to users solely because they hold, use, or retain payment stablecoins. The earlier draft implementation rules went further, proposing that certain arrangements could be presumed to violate the law if issuers offered similar yield through affiliates, exchanges, or other third-party partners.
However, the OCC removed this presumption-of-violation provision from the final implementation rules, opting instead to assess on a case-by-case basis whether such arrangements involve evading the law.
This change does not remove the GENIUS Act’s ban on issuers directly paying interest or yield, nor does it mean that all third-party yield arrangements have been deemed legal. For cryptocurrency platforms such as Coinbase that offer stablecoin yield rewards, these activities must still comply with applicable laws and may be subject to regulatory review.
U.S. Banking Industry Criticizes Regulatory Loophole as Crypto Industry Supports Rule Change
The OCC’s decision immediately drew pushback from the U.S. banking industry. Rob Nichols, CEO of the American Bankers Association (ABA), said that removing the presumption-of-violation provision could allow stablecoin issuers to offer yield with similar economic effects through third-party platforms, thereby circumventing the law’s direct restrictions on issuers.
The ABA argued that if stablecoins can continue to offer yield rewards through third-party platforms, consumers may be drawn to move funds from bank deposits into stablecoins, affecting community banks’ deposit bases and lending capacity. The Bank Policy Institute raised similar concerns.
By contrast, the Blockchain Association supported the change. The association’s Chief Policy Officer, Lindsay Fraser, said removing the presumption-of-violation provision would bring the final implementation rules more closely in line with the text of the GENIUS Act.
Stablecoin yield arrangements are also one of the contentious issues in U.S. market structure legislation discussions around the CLARITY Act, with the banking and cryptocurrency industries divided over how the law applies to third-party yield reward arrangements.
Issuer Authorization Requirements Take Effect in 2027, Some Sales Restrictions Delayed Until 2028
Under Section 20 of the GENIUS Act, the law is generally set to take effect 18 months after it is signed into law or 120 days after the primary federal payment stablecoin regulators issue final implementation rules, whichever comes first. The OCC has confirmed that the applicable effective date is January 18, 2027, and that its final implementation rules will also take effect on that date.
At that point, businesses issuing payment stablecoins in the United States will generally be required to qualify as permitted issuers under the law, including by obtaining federal authorization or meeting the issuer eligibility and applicable requirements under a state regulatory framework. Continuing to issue payment stablecoins without authorization may result in criminal penalties.
However, the Act sets separate transition periods for different business activities. For example, the restriction in Section 3 on digital asset service providers selling or offering payment stablecoins issued by non-permitted issuers to people in the United States will generally not apply until July 18, 2028, and is subject to certain exceptions.
The OCC has also established transitional exemptions for existing issuers. Eligible businesses that submit a substantially complete application for issuer authorization before January 18, 2027, and whose applications remain under review, may apply to the OCC for a temporary exemption from some regulatory requirements for up to 12 months. These exemptions do not take effect automatically and remain subject to OCC review and approval.
The OCC is still waiting for the U.S. Office of Management and Budget (OMB) to complete its review of the application forms before it officially begins accepting applications for issuer authorization and transitional exemptions. In addition, related rules concerning the Bank Secrecy Act (BSA), anti-money laundering (AML), and economic sanctions will be developed separately by the OCC and the U.S. Treasury Department.
Therefore, January 18, 2027, is primarily the effective date of the GENIUS Act and the OCC’s final implementation rules, as well as a key milestone when payment stablecoin issuer eligibility requirements begin to apply. Other specific business restrictions and supporting regulations will follow different implementation timelines.
“U.S. Finalizes GENIUS Act Rules: Stablecoin Yield to Be Reviewed Case by Case, Full Rollout in 2027” was first published on “Crypto City.”