In July of 2025, the GENIUS Act, the first comprehensive federal framework for stablecoins, became law. Last week, the US Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking (NPRM) to implement the GENIUS Act’s requirements for payment stablecoin issuance and related activities. While the new proposed rulemaking makes the GENIUS Act a reality instead of just a statute, it doesn’t change the intent of the GENIUS Act. It operationalizes the GENIUS Act by creating a dedicated regulatory section for issuers, establishing the licensing mechanics and timelines, forming the capital and operational requirements, and stipulating foreign issuer treatment.
The 2025 GENIUS Act had a crucial role in setting the stage for the legality of stablecoin payments. It defined what a payment stablecoin is and who is allowed to issue stablecoins. It stipulated that stablecoins require full reserve backing with liquid assets, prohibited interest-bearing stablecoins, and created a federal and state regulatory structure. Overall, the purpose of the 2025 Act was to set guardrails.
With this year’s notice of proposed rulemaking, the OCC is bringing a more procedure-focused approach. As mentioned above, the OCC is operationalizing the GENIUS Act in four major ways, the first of which creates a dedicated regulatory section (12 CFR Part 15) that establishes standards and requirements for stablecoin issuers. Creating the new part in the CFR changes the GENIUS Act from a written requirement into more enforceable supervisory standards. New licensing mechanics come into play that create a defined pathway for entering the stablecoin market.
Under the OCC’s proposal, prospective permitted payment stablecoin issuers (PPSIs) must submit a formal application outlining their business model, governance structure, reserve management approach, technology infrastructure, and risk controls. The proposal establishes what constitutes a “substantially complete” application and outlines supervisory review expectations. The new licensing process makes stablecoin issuance similar to applying for a bank charter, rather than launching a new product. The OCC’s 2026 capital and operational requirements make stablecoin issuance look more like running a regulated financial institution than launching a new product.
While the 2025 GENIUS Act focused primarily on reserve backing, the OCC’s 2026 proposal stipulates minimum capital thresholds, liquidity buffers beyond token redemption obligations, formal governance structures, internal control standards, and explicit third-party risk management expectations. These new formalities raise the cost of entry into the stablecoin issuance market. The OCC’s 2026 proposal incorporates foreign issuer rules directly into the scope of the plan, meaning that non-US players can no longer rely on regulatory ambiguity as a strategy to enter the market. Just as the proposed framework requires US issuers, foreign issuers serving US users would still be required to apply for OCC registration, provide evidence of Treasury’s comparability determination, consent to US jurisdiction and OCC access to records, and meet requirements around US-available reserves (subject to any reciprocal arrangement).
This limits offshore entities operating in regulatory gray zones while marketing to US customers. The new rulemaking makes clear that global stablecoin players will need to align with US supervisory expectations, creating a more demanding roadmap for cross-border participation. The proposed rulemaking makes clear that stablecoins are moving closer to the core of regulated banking activity and are increasingly being treated as part of the financial infrastructure rather than as a crypto experiment. As stablecoin issuance begins to resemble supervised activity, banks enter the conversation from a position of structural advantage.
With governance frameworks, capital planning, risk management, and compliance processes already embedded in their operating models, traditional financial institutions may be better positioned than fintechs to comply with the regulatory demands of stablecoin issuance. As compliance costs associated with stablecoin issuance rise, so does the barrier to entry. Not every fintech will have the appetite or resources to meet capital, liquidity, and supervisory expectations.
The increased friction, however, brings institutional credibility to a payment type once considered adjacent to Bitcoin. This credibility lowers the risk for issuers as well as for end consumers and will ultimately transform stablecoins into an everyday tool.
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