The Office of the Comptroller of the Currency today released a proposed rule to implement the Genius Act, outlining standards for stablecoin activities, custody, and risk management. The 376-page proposal would set a minimum capital floor of $5 million for de novo stablecoin issuers and would apply to payment stablecoin issuers and foreign payment stablecoin issuers under OCC jurisdiction, as well as certain custody activities conducted by OCC-supervised entities. Issues related to the Bank Secrecy Act, anti-money laundering, and Office of Foreign Asset Control sanctions will be addressed in a separate rulemaking in coordination with the Treasury Department. The agency notes the framework is intended to allow the stablecoin industry to flourish safely and invites broad feedback.
Regarding the prohibition on paying interest, concerns have been raised that the ban could be bypassed through yield or rewards arrangements with exchanges or affiliates; the OCC states issuers could attempt to bypass the ban via arrangements with third parties. The rule creates a presumption that interest or yield is being paid if there is a contract between the issuer and an affiliate or related party to pay yield to that party, with the affiliate paying holders solely in connection with holding the stablecoin. Other arrangements not captured by the presumption may also violate the prohibition and will be evaluated on a case-by-case basis, but such arrangements are not included in the presumption at this time. The OCC would assess those arrangements as they arise.
Comptroller of the Currency Jonathan Gould said the OCC has thoughtfully considered a regulatory framework in which the stablecoin industry can flourish in a safe and sound manner and welcomed broad feedback to inform a practical final rule. Comments on the rule are due 60 days after publication in the Federal Register.
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