US OCC cuts daily liquidity requirement for stablecoin issuers' reserves to 5%
Key Facts
The US Office of the Comptroller of the Currency lowered the minimum daily liquidity requirement for reserves held by payment stablecoin issuers subject to its rules to 5%, from 10% in its earlier proposal, under a final rule announced on 21 October 2026 to implement the GENIUS Act. The final text retained the requirement that reserves equal or exceed the value of outstanding stablecoins at all times, with reserves segregated from the issuer's other assets. The change gives issuers greater flexibility in the composition of their reserves while maintaining their obligation to fully back issued stablecoins. On capital, the OCC retained the $5 million minimum and extended its application beyond the start-up phase. The rule also requires an operational backstop comprising assets equivalent to total expenses for 12 months, according to the final text.
On redemptions, the OCC set a normal maximum deadline of two business days to execute a stablecoin holder's request, with extensions possible by supervisory decision. The obligation begins when the request is received and customer onboarding and the necessary legal requirements have been completed, provided onboarding procedures are designed to prevent unjustified customer delays. The OCC rejected automatically allowing cross-border redemptions more time than domestic redemptions. An issuer is considered to have executed a redemption when it has processed and initiated the transfer, under the final text's definition of execution. The text also allows a redemption to be considered executed by crediting the amount to the customer's account with the issuer, if the customer requests it.
On yields, the OCC removed a rebuttable presumption of a violation that it had proposed applying to certain yield arrangements involving issuer affiliates, according to the American Bankers Association's journal. The OCC justified the change by saying that "payment stablecoins are an emerging market." Stablecoin issuers remain prohibited from paying interest to holders, according to the Associated Press's account of the final rules. Trading platform rewards will be assessed on a case-by-case basis. The American Bankers Association warned, according to the agency, that the OCC's decision threatens "the funds banks use to make the loans that drive the US economy."
The rule covers bank, nonbank and foreign issuers under OCC jurisdiction, along with certain state-licensed issuers, according to its regulatory bulletin. The reporting instructions treat weekly and quarterly reports differently in terms of public availability. Data collected in the weekly report are confidential, and unauthorized disclosure is prohibited, according to the instructions for that report. Quarterly reports, by contrast, are made publicly available through the OCC. Portions of those reports may receive confidential treatment upon a substantiated request and supervisory approval.
On licensing, the OCC will begin accepting license and exemption applications after receiving final Office of Management and Budget approval for the information collection associated with the application forms. The OCC must notify an applicant within 30 days of receipt whether the application is substantially complete, according to the bulletin governing the procedures. It must then decide on the application within no more than 120 days of determining that it is substantially complete. Anti-money laundering, Bank Secrecy Act and sanctions requirements will be addressed in a separate rulemaking in coordination with the Treasury Department, according to the OCC's statement. The OCC also submitted revised reporting forms for public comment for 30 days from publication of the information collection action in the Federal Register.
The final rule and the GENIUS Act take effect on 18 January 2027, according to the date announced by the OCC. The OCC set 25 January 2027 as the reference date for the first weekly report, subject to Office of Management and Budget approval. The submission instructions require weekly reports to be filed every Wednesday by 5:00 p.m. Eastern Time, with the deadline shifted if it falls on a federal holiday. The first quarterly report has a reference date of 31 March 2027 and is also subject to Office of Management and Budget approval. The instructions give issuers no more than 30 calendar days after the quarterly report date to file it, with submission deadlines shifted for holidays in accordance with the instructions.