In a watershed moment for the American cryptocurrency industry, the Office of the Comptroller of the Currency (OCC) has released a comprehensive 376-page proposed rulebook to implement the GENIUS Act. Released late Wednesday, this sprawling regulatory framework establishes a rigorous federal oversight regime for payment stablecoins, mandating a $5 million capital floor for new issuers and enforcing a strict prohibition on interest payments. As Washington moves to cement its status as the global standard-setter for digital assets, these new OCC stablecoin rules 2026 signal the end of the unregulated "wild west" era for dollar-pegged tokens.
The $5 Million Capital Floor: Raising the Bar for Issuers
One of the most significant provisions in the new proposal is the establishment of a tangible financial barrier to entry. Under the new GENIUS Act regulation, de novo (new) stablecoin issuers will be required to maintain a minimum capital floor of $5 million. This requirement is designed to ensure that only financially robust entities can enter the market, effectively filtering out undercapitalized startups that could pose systemic risks to consumers.
"The OCC has given thoughtful consideration to a proposed regulatory framework in which the stablecoin industry can flourish in a safe and sound manner," said Comptroller Jonathan V. Gould in a statement accompanying the release. By aligning crypto capital requirements with traditional banking standards, the OCC aims to bolster confidence in digital dollars. While established giants like Circle or PayPal may easily absorb these costs, smaller fintech disruptors now face a much steeper climb to compliance, potentially consolidating the market around a few dominant players.
Closing the Yield Loophole: A Strict Ban on Interest
Perhaps the most contentious aspect of the rulebook is its aggressive stance on yield-bearing products. The GENIUS Act explicitly bans issuers from paying interest on stablecoins to distinguish them from security-like investment contracts. However, the industry has long relied on third-party "workarounds"—marketing campaigns where exchanges or DeFi platforms offer yield on idle balances. The new payment stablecoin legislation explicitly targets these arrangements.
The OCC's proposal adopts a "presumption of interest" standard. If an issuer has any contractual arrangement with a third party that pays yield to token holders, the regulator will view it as a violation of the interest ban. This provision is a direct shot at the stablecoin interest ban loopholes that have allowed crypto exchanges to offer high-yield savings products on ostensibly non-interest-bearing tokens. Banking trade groups have lauded this move, arguing that it levels the playing field between crypto firms and traditional banks, which face stricter constraints on deposit rates.
Targeting Third-Party Rewards
The rule specifically notes that if an affiliate or partner pays rewards solely connected to holding the token, the issuer is liable. This effectively forces issuers to sever ties with platforms offering "earn" programs if they want to retain their federal license. For investors accustomed to 4-5% APY on their digital cash, this regulatory tightening could mark the end of passive income on stablecoins held in compliant US custodial wallets.
Federal Oversight and 1:1 Reserve Standards
Beyond capital and interest rules, the 376-page document cements the "gold standard" for reserves. All federally regulated payment stablecoins must be backed 1:1 by high-quality liquid assets (HQLA), specifically defined as U.S. Treasury bills, reverse repurchase agreements, or cash held at insured depository institutions. This aligns US crypto regulation updates with the transparency demands that emerged following the 2022 algorithmic stablecoin collapses.
The OCC also asserted its jurisdiction over foreign issuers wishing to operate in the U.S., requiring them to register and comply with equivalent standards. This extraterritorial reach ensures that offshore entities cannot undercut American firms by skirting digital asset banking laws. Issuers will have to publish monthly proof-of-reserve reports, audited by registered public accounting firms, to prove their solvency to the public and regulators alike.
What’s Next for the Crypto Industry?
The release of this proposal triggers a 60-day public comment period, during which industry lobbyists and consumer advocates will battle over the finer details. While the GENIUS Act was signed into law in July 2025, full implementation is slated for early 2027. This gives crypto companies less than a year to overhaul their balance sheets and business models.
For now, the message from Washington is clear: stablecoins are welcome in the U.S. financial system, but only if they play by banking rules. As the comment period opens, all eyes will be on how major issuers navigate these stringent new capital and operational demands without stifling the innovation that defined the sector's rise.
