OCC Proposes GENIUS Act Implementation Rule with Stablecoin Yield Prohibition

The US Office of the Comptroller of the Currency (OCC) has taken a significant step towards regulating the digital currency market by proposing a rulemaking to implement the GENIUS Act. The proposed rule aims to establish a comprehensive regulatory framework for payment stablecoins, which are designed to maintain a stable value pegged to a fiat currency.

The OCC seeks public comments on the proposed rule over the next 60 days, allowing stakeholders to provide input and feedback before the final implementation. According to Comptroller Jonathan Gould, the goal of the GENIUS Act system is to enable stablecoins to 'flourish in a safe and sound manner,' accelerating nonbank issuance and innovation while addressing regulatory gaps.

The proposed rulemaking includes provisions for permitted and foreign payment stablecoin issuers under OCC supervision, as well as certain custody and reserve asset activities. However, the Bank Secrecy Act, anti-money laundering, and Office of Foreign Assets Control sanctions will be addressed in a separate rulemaking coordinated with the US Department of the Treasury.

The GENIUS Act is expected to take effect within 18 months of its enactment date (January 2027), pending congressional approval. Meanwhile, the American Banking Association has requested that the OCC delay national bank charter reviews for Ripple, Coinbase, Circle, and other crypto firms.