What happened

On 21 October 2026 the OCC issued its final rule implementing the GENIUS Act for the stablecoin issuers it supervises: subsidiaries of national banks and federal savings associations, federal qualified issuers, certain state issuers and foreign issuers. It takes effect on 18 January 2027, the same day as the Act itself. The OCC will announce separately when it starts accepting applications, and the Bank Secrecy Act, anti-money laundering and sanctions rules will come in a separate rulemaking with the Treasury[1].

The rule drew about 328 comments[2], and the changes from the February proposal matter more than the headlines. In September I wrote about the Fed's draft rules and the choice between stablecoins and tokenised deposits. This is the first rulebook a bank can actually build against.

Why it matters

The proposal would have extended the redemption deadline to seven calendar days if an issuer faced redemption requests above 10% of its outstanding issuance in a single 24-hour period. The final rule removes that extension. Redemption may not take longer than two business days, and an issuer that crosses the 10% threshold must simply notify the OCC within 24 hours[2].

That is a stricter promise than the proposal, and the OCC softened other parts of the rule to pay for it. It cut the minimum share of reserves held in demand deposits or at a Federal Reserve Bank from 10% to 5%, dropped a separate weekly liquidity requirement, and changed the 40% concentration test into a limit on exposure to any one counterparty. It kept the $5 million capital floor and extended it beyond the de novo period. It also set the operational backstop at 12 months of total expenses, rejecting the six months used in recent bank charter approvals[2].

What most people are missing

First, issuer liquidity ends up on bank balance sheets. The 5% buffer sits in demand deposits, and the 40% cap means reserves must be spread across several counterparties. Those deposits belong to an entity that must pay out within two days if holders run. For the bank holding them, they are about as stable as a hedge fund's cash. Treasurers who welcome stablecoin reserve deposits as cheap funding should model them as an outflow that leaves together, on the same day, as the issuer's redemption queue.

Second, the AML rulebook is missing. Licensing can begin under this rule while the BSA, AML and sanctions requirements for issuers are still unwritten. The same agency imposed the largest civil money penalty in its history, $750 million, on Bank of America on 13 October for deficient BSA/AML compliance[3]. Any bank that assumes its issuing subsidiary can launch on lighter controls and catch up later is misreading this supervisor.

Third, the yield fight has moved, not ended. Issuers still may not pay holders interest for simply holding a stablecoin, but the OCC removed the proposed presumption that certain affiliate and third-party arrangements breach that ban[4]. Rewards paid around the coin will now be judged case by case. That is where competition with bank deposits will play out.

What to do on Monday

  • Classify stablecoin reserve deposits now. Decide how your liquidity framework treats them before the first issuer asks to place them, and price them accordingly.
  • Run a two-day redemption drill. If you plan to issue, test whether you can meet a day with redemptions above 10% of issuance using only the reserve assets and counterparties the rule allows.
  • Build AML to the bank's standard. Do not wait for the separate rule. The issuing subsidiary will be examined by the agency that has just set its penalty record.
  • Map your rewards programmes against the yield ban. Anything that pays customers for holding a partner's stablecoin needs a legal view before January.