1. Key Considerations for Prospective Stablecoin Issuers Under the GENIUS Act

The Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”), enacted in July 2025, establishes comprehensive federal guidelines governing the issuance of payment stablecoins in the United States. At a high level, the Act adopts the gating principles that (i) only “permitted payment stablecoin issuers” may issue payment stablecoins in the United States, and (ii) digital asset service providers are prohibited from offering payment stablecoins which are not issued by permitted stablecoin issuers or qualifying foreign issuers to U.S. users.¹ Stablecoins that fall outside of the definition of “payment stablecoins” remain subject to other regulatory regimes, including, potentially the federal securities laws. The GENIUS Act will become effective at the earlier of January 18, 2027 or 120 days after final related regulations are issued.

While the GENIUS Act sets forth the statutory framework, it leaves substantial operational detail to implementing regulations. In March 2026, the Office of the Comptroller of the Currency (the “OCC”) issued a notice of proposed rulemaking (the “Proposal”) that provides the most comprehensive indication to date of how the regime is expected to function in practice.² The Proposal adopts a bank-like model, with requirements relating to licensing, capital, reserves, custody and risk management. The Proposal requests public comment, with comments due back on May 1, 2026.

Set out below is a review of key provisions of the Proposal for (i) U.S. entities seeking to become stablecoin issuers, with a focus on institutional versus non-institutional entrants, and (ii) foreign issuers seeking access to the U.S. market.

2. Domestic Issuers: Institutional vs. Nonbank Entrants

The GENIUS Act contemplates multiple pathways to permitted issuer status, including bank-affiliated structures and federally licensed nonbank entities. The Proposal, however, indicates that these pathways are not equivalent in practice, both in terms of the regulatory standards applied and the process required to obtain and maintain permitted user status. The framework also contemplates participation by state-chartered or state-licensed issuers, but subjects federally qualified issuers to exclusive OCC supervisions and preempts certain overlapping state regulatory requirements.³

1. Institutional and Bank-Affiliated Issuers.

Under the GENIUS Act, insured depository institutions and their subsidiaries may act as permitted payment stablecoin issuers, subject to applicable regulatory approval. In practice, the Proposal indicates that such entities are comparatively well-positioned to satisfy the GENIUS Act’s requirements, given their existing regulatory infrastructure. Capital adequacy, liquidity management, governance and compliance expectations under the Proposal largely align with existing bank regulatory standards.

2. Nonbank Issuers.

The GENIUS Act does permit nonbank entities to become federally approved stablecoin issuers. However, the Proposal reflects that such entities would be required to operate within a substantially bank-like regulatory framework.

In particular, nonbank issuers would be expected to satisfy requirements relating to:

1. Capital, including minimum capital thresholds and ongoing supervisory calibration;


2. Reserves, including full backing by high-quality, highly liquid assets (such as cash and short-duration U.S. Treasury instruments), with requirements that are generally aligned across bank and nonbank issuers and subject to ongoing maintenance and supervisory oversight;


3. Custody, including requirements to hold reserve assets directly or with qualifying regulated custodians; and


4. Risk management and governance, including enterprise-wide controls and operational resilience.⁴

The Proposal applies a largely consistent reserve framework across bank-affiliated and nonbank issuers, emphasizing full backing by high quality, highly liquid assets, while leaving implementation subject to supervisory oversight.

In addition, the GENIUS Act prohibits the payment of interest or yield to stablecoin holders, and the Proposal would implement this prohibition broadly across both bank-affiliated and nonbank issuers, including through arrangements with affiliates or third parties designed to replicate yield exposure.⁵ While the Proposal does not define “yield” with precision, it makes clear that the prohibition applies regardless of form, whether in cash, tokens, or other consideration, and reflects a substance-over-form approach focused on prohibiting economic return.

These requirements materially increase the cost and complexity of entry for nonbank participants. Although the statutory framework is formally open to nonbanks, the Proposal suggests that successful entry will likely require significant capitalization, mature compliance capabilities and, in many cases, reliance on regulated financial institutions for custody, reserve management and related functions.

3. Practical Implications.

Taken together, the statutory framework and the Proposal indicate a clear policy direction: stablecoin issuance is expected to occur within, or in close proximity to, the existing banking regulatory perimeter. Nonbank participation remains viable, but is likely to be concentrated among larger or more sophisticated market participants.

3. Foreign Issuers: Accessing the U.S. Market

The GENIUS Act restricts the offering or sale of payment stablecoins in the United States to those issued by permitted U.S. issuers or qualifying foreign issuers and establishes a framework governing foreign stablecoin issuers seeking to access the U.S. market.

The Proposal provides further detail on this framework, indicating that foreign payment stablecoin issuers would be required to register with the OCC in order to issue stablecoins in the United States or have their issued stablecoins traded on U.S.-based platforms.⁶

Notably, the Proposal does not contemplate a materially lighter-touch system for foreign issuers, although it does indicate that the assessment of a foreign issuer’s home regulatory regime will be relevant in determining eligibility to access the U.S. market. Registered foreign issuers would, in practice, be subject to materially similar supervisory, reporting and examination requirements as domestic permitted issuers.⁷ This approach has several implications, including:

1. limiting the potential for regulatory arbitrage through offshore issuance, as foreign issuers cannot rely solely on home jurisdiction regulation if they seek meaningful U.S. distribution;


2. introducing structural considerations for foreign market participants, as compliance may require establishing a U.S. presence, utilizing U.S.-regulated custodians or otherwise aligning operations with U.S. regulatory expectations; and


3. reinforcing the role of U.S.-regulated intermediaries as key access points for foreign issuers, particularly with respect to custody, reserve management and distribution.

Practical Implications. For foreign issuers, the GENIUS Act and the Proposal collectively establish that access to the U.S. market will depend on an issuer’s ability to achieve regulatory equivalence with the same U.S. standards expected of local issuers.

4. General Strategic Considerations

The GENIUS Act and the OCC’s Proposal, taken together, are likely to have several broader effects on the stablecoin market, including to areas where further regulatory clarity or calibration may be warranted as part of the rulemaking process.

1. Barriers to entry and calibration requirements. The Proposal’s capital, reserve, custody and governance requirements are likely to limit participation to well-capitalized and operationally sophisticated entities. Market participants may seek clarification on whether these requirements can be calibrated based on issuer size, risk profile or business model, particularly for nonbank entrants.


2. Scope of permissible yield-related activities. The Proposal’s broad prohibition on “yield,” including through indirect or structured arrangements, may introduce interpretive uncertainty. Stakeholders may wish to comment on the treatment of rewards programs, promotional incentives and other forms of customer engagement that could be viewed as conferring economic return.


3. Treatment of foreign issuers and regulatory equivalence. While the Proposal contemplates access for foreign issuers, it does not establish a streamlined substituted compliance or passporting framework. Foreign issuers and intermediaries may seek greater clarity on how “comparable” home-country regulatory regimes will be assessed and whether such comparability can streamline registration or ongoing compliance obligations.


4. Role of regulated intermediaries and operational dependencies. The framework effectively reinforces reliance on U.S.-regulated custodians, banks and service providers. Market participants may wish to assess the extent to which these requirements create operational dependencies or concentration risk, and whether additional flexibility is appropriate.


5. Supervisory scope and implementation expectations. The Proposal leaves certain implementation details to supervisory interpretation and ongoing examination. Issuers may seek greater transparency regarding supervisory expectations, examination standards and the potential for phased implementation.

The GENIUS Act reflects a policy objective of integrating payment stablecoin issuance into the regulated financial system. The Proposal indicates that this integration will be achieved through a framework that emphasizes strict oversight of reserve integrity and operational resilience, positioning the United States as a high-regulation, high-credibility jurisdiction for stablecoin activity.

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¹ Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency, 91 FED. REG. at 10,202, 10,203 (Mar. 2, 2026).
² Id., at 10,202.
³ Id., at 10,203, 10,204.
⁴ Id., at 10,205-07.
⁵ Id., at 10,211, 10,212.
⁶ Id., at 10,204, 10,205.
⁷ Id., at 10,202, 10,234-36, 10,298.

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