On 21 October 2026, the US Office of the Comptroller of the Currency issued its final rule implementing the GENIUS Act for payment stablecoin issuers under its oversight, including banks, nonbank issuers and certain foreign issuers. Both the rule and the statute take effect on 18 January 2027. Issuers must back outstanding coins one-to-one with segregated reserves drawn from a closed list of safe assets, keep at least 5% of reserves liquid each day (down from 10% in the proposal), and generally honour redemptions within two business days. If redemption requests exceed 10% of a stablecoin brand's outstanding value, the supervisor must be told within 24 hours. A permanent $5 million capital floor applies, together with an operational backstop of roughly twelve months of expenses, and issuers face annual examinations, weekly confidential reporting and monthly public disclosure of reserve composition. Interest or yield paid merely for holding a coin stays prohibited; anti-money laundering and sanctions rules are left to a separate rulemaking. This matters well beyond the United States, because it is the first detailed prudential blueprint turning dollar stablecoins from a crypto product into a supervised payment instrument!

In my view, the rule's strongest feature is its focus on operational reality: the requirement that issuers prove they can actually access and monetise reserves under stress is worth more than any headline reserve ratio. I am less convinced by two choices. First, replacing the presumption against affiliate yield arrangements with case-by-case supervisory review creates uncertainty precisely where market incentives to circumvent the yield ban are strongest. Second, launching a licensing regime while the AML and sanctions framework is still pending means issuers are building compliance systems against proposals rather than final law. The practical lesson for fintech counsel everywhere is clear: stablecoin regulation is now bank regulation, and governance, liquidity and reporting capacity must be designed before the token, not after it. I believe regulators in other jurisdictions will borrow heavily from this template!

Source: Sheppard Mullin, 22 October 2026; Forbes, 23 October 2026