Two-Day Redemption Limit in New U.S. Stablecoin Rules Takes Effect in 2027
Key Facts
The U.S. Office of the Comptroller of the Currency on October 21, 2026, issued a final rule implementing the GENIUS Act for stablecoins, setting requirements for reserves, redemption and risk management before it takes effect on January 18, 2027. The office said the rule covers permitted payment stablecoin issuers and foreign issuers under its jurisdiction, as well as certain custody activities at entities it supervises. The deadline gives affected entities a transition period to prepare for issuance and oversight requirements. The agency issued three notices related to implementing the law on the day of the announcement, according to a Wolters Kluwer analysis. Comptroller of the Currency Jonathan Gould said the framework provides "strong standards for reserve backing, redemption and risk management."
The rule requires permitted issuers to hold reserves of specified value covering outstanding stablecoins at a ratio of at least 1 to 1, consistent with the backing requirement set out in the law. Issuers must also establish a clear redemption policy and may set a minimum redemption request of no less than one stablecoin. The rule defines timely redemption as no more than two business days after the date of the request. These provisions give token holders a defined timeframe for redemption, while obligating issuers to hold assets backing outstanding tokens. The office said risk management standards are flexible and proportionate to the nature, scope and risk level of an issuer’s activities.
The rule says oversight will focus on the activities an issuer conducts rather than solely on the type of institution. Under this approach, requirements cover permitted issuers and foreign issuers within the office’s jurisdiction, as well as certain custody activities at entities under its supervision. The rule does not extend to all banks and fintech companies, and the office did not describe it as a general set of rules for all such institutions. By contrast, it excludes Bank Secrecy Act, anti-money-laundering and Office of Foreign Assets Control sanctions provisions. The office said those matters will be addressed in a separate rulemaking process in coordination with the Treasury Department.
Prior approval remains a practical focus for the next phase: starting January 18, 2027, entities generally must obtain approval as permitted issuers before issuing payment stablecoins in the U.S. market, according to a Wolters Kluwer analysis. The analysis expects exemptions for existing issuers that submit substantially complete applications before that date. The anticipated reporting requirements include weekly reports expected to begin on January 25, 2027, and quarterly reports beginning on March 31, 2027, subject to the necessary approvals. The Office of the Comptroller of the Currency said it will announce in a separate statement when it will begin accepting and processing issuance and exemption applications. That forthcoming procedural announcement makes the next step for prospective issuers clear before they begin the application process.
The framework leaves room for rewards offered by stablecoin trading or custody platforms, despite calls from banking groups to ban the practice. The Associated Press said issuers such as Circle will remain barred from paying interest directly to token holders, while platforms may pass returns on to customers as interest-like rewards. Platforms may do so "on a case-by-case basis," the agency told the news service, as the rule does not prohibit the practice. The distinction reflects part of the dispute over how returns linked to stablecoins should be treated and who may offer them. Banking groups objected to leaving this latitude for platforms.
Banking groups warned that rewards could encourage customers to move savings from banks to crypto platforms, potentially reducing deposits available to fund lending. The Associated Press quoted the American Bankers Association as saying the office’s decision threatens "the money banks use to make the loans that drive the U.S. economy." The objection brings the impact of competition for deposits between banks and stablecoin platforms back into the debate, as the framework sets limits on paying returns to users. The U.S. president signed the GENIUS Act on July 18, 2025, establishing a framework to regulate payment stablecoins. The bill had earlier passed the Senate with bipartisan support, by 68 votes to 30, on June 17, 2025, before being sent to the House of Representatives.