Building on December's charter approvals for firms like Circle and Ripple, the U.S. Office of the Comptroller of the Currency (OCC) has proposed detailed rules to implement the GENIUS Act for stablecoin issuers, addressing reserves, custody, redemption, and rewards programs on platforms like Coinbase. The 376-page proposal emerged on the eve of a Senate Banking Committee hearing where regulators testified on crypto oversight, amid industry concerns over operational impacts.
The Office of the Comptroller of the Currency (OCC) issued a 376-page proposal on Wednesday to regulate stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, enacted in July 2025. This follows the agency's December conditional approvals of national trust bank charters for five firms—Circle, Ripple, BitGo, Fidelity Digital Assets, and Paxos—bringing more stablecoin activities under federal supervision. The new rules outline standards for reserve requirements, asset custody, token redemption, and business registration. OCC chief Jonathan Gould stated, “The OCC has given thoughtful consideration to a proposed regulatory framework in which the stablecoin industry can flourish in a safe and sound manner.”
The proposal has raised alarms in the crypto sector, particularly regarding stablecoin rewards. It suggests that close financial ties between issuers, such as Circle, and platforms like Coinbase could enable evasion of the GENIUS Act's prohibition on interest and yield payments by issuers. However, firms can rebut this presumption with sufficient evidence. Industry insiders, speaking anonymously, described the language as concerning but potentially leaving room for third-party rewards programs. Todd Phillips, a former Federal Deposit Insurance Corp. lawyer, told CoinDesk, “I think there's some play in the joints of what the OCC has proposed,” adding that “the OCC has clearly gone beyond what the statute requires.”
These developments coincided with a Thursday Senate Banking Committee hearing on bank regulators. Federal Reserve Vice Chair for Supervision Michelle Bowman noted the Fed is developing capital and liquidity rules for stablecoin issuers and seeking clarity on digital asset activities. The hearing also addressed broader crypto issues, including Senator Elizabeth Warren's criticism of OCC approvals for banks like Erebor and applications from World Liberty Financial, tied to President Donald Trump and his family. Gould responded that applications are processed consistently and rejected suggestions of impropriety.
Discussions touched on stablecoin rewards' potential threat to bank deposits, a key contention in negotiations over the Digital Asset Market Clarity Act. FDIC Chairman Travis Hill said banks are performing well, while Committee Chairman Tim Scott noted no evidence of deposit flight, with U.S. banking deposits recently increasing. Senator Angela Alsobrooks emphasized concerns from community banks. The OCC proposal opens a public comment period, with final rules to follow after review.
