U.S. Cuts Stablecoin Reserve Liquidity Minimum to 5%, Adopts Issuance Rules
Key Facts
The U.S. Office of the Comptroller of the Currency cut the minimum daily liquidity requirement for payment stablecoin issuers' reserves to 5%, from 10% in its earlier proposal, under a final rule announced on 21 October 2026 to implement the GENIUS Act. The rule retained the requirement for issuers to back stablecoins with reserves of at least 1 to 1 at all times, while easing daily liquidity requirements. Assets counted toward this liquidity include funds available on demand and balances at the Federal Reserve, according to the agency's final text. The text runs to 721 pages covering the framework for issuing payment stablecoins and requirements for entities under the regulator's jurisdiction. The regulation extends beyond reserves to cover redemption, risk management, capital, supervision and certain custody activities. The agency justified easing the quantitative restrictions by adding stress tests and requirements for additional reserves to support issuers' ability to meet redemption requests.
On redemption, the rule set a standard deadline of two business days within which an issuer must fulfill a stablecoin holder's request, according to the final text. That period begins after the redemption request is submitted to the issuer and may be extended with regulatory approval. On reserve composition, the agency did not adopt a separate limit on weighted average maturity in the final requirements governing assets held to back issued coins. On capital, the rule retained a minimum of $5 million and required it to remain in place beyond the issuer's startup period. This capital obligation therefore continues after the startup phase, alongside the framework's requirements for reserve management and fulfillment of redemption requests.
On yield, the Office of the Comptroller of the Currency removed from the final rule a proposed rebuttable presumption of a violation for arrangements involving yield payments through parties affiliated with an issuer. The agency will assess these arrangements based on their individual facts, according to the final text's provisions on the regulatory treatment of indirect yield. Issuers themselves remain prohibited from paying yield, and the agency retains authority to act against arrangements that circumvent the ban. The American Bankers Association, meanwhile, warned that the agency's decision threatens the funds banks rely on to finance loans, according to the Associated Press. The association described the funds at risk as "the money banks use to make the loans that drive the U.S. economy."
Treasury Secretary Scott Bessent placed the federal stablecoin framework in a historical context, comparing it to the National Currency Act of 1863 in remarks included in the Office of the Comptroller of the Currency's statement. Bessent said that law "created a national framework for bank-issued currency," citing it in his discussion of the federal stablecoin framework. The new rule covers banking entities under the agency's jurisdiction, according to its bulletin on implementing the law. Its scope also extends to nonbank entities covered by the framework and foreign payment stablecoin issuers subject to its jurisdiction. Bank Secrecy Act, anti-money laundering and sanctions requirements will be addressed in a separate rulemaking coordinated with the Treasury Department, according to the agency's statement.
The rule takes effect on 18 January 2027, according to the date announced by the Office of the Comptroller of the Currency in its regulatory bulletin. The agency will begin accepting licensing and exemption applications after receiving final approval from the Office of Management and Budget for the information collection associated with the application forms. It said issuers with substantially complete applications pending before it may request an exemption from the requirements of the law or the rule. On reporting, the agency set 25 January 2027 as the deadline for the first weekly report, subject to Office of Management and Budget approval. Subject to the same condition, it set 31 March 2027 as the deadline for the first quarterly report under the new framework's reporting requirements.