OCC stablecoin rule leaves rewards open as Circle jumps 6%
The first final regulation under the GENIUS Act eased several limits on stablecoin issuers and declined to ban exchange rewards outright, sending Circle, Coinbase and Strategy shares higher.
The OCC stablecoin rule is final. On Wednesday, Oct. 21, the Office of the Comptroller of the Currency issued the first final regulation implementing the GENIUS Act, setting standards for reserves, redemptions and risk management for payment stablecoin issuers it supervises. The rule and the law take effect on Jan. 18, 2027.
What happened
The rule covers permitted payment stablecoin issuers, foreign issuers under the agency's jurisdiction and some custody activities at OCC-supervised banks. Anti-money laundering and sanctions rules will come separately, in coordination with the Treasury, and the OCC said it would announce later when it starts accepting applications. It received hundreds of comments on its proposal.
Several proposed limits were eased, Yahoo Finance reported. The agency dropped a maturity cap that would have kept issuers out of longer-dated Treasurys, relaxed limits on how much can sit with one counterparty and allowed bank deposits to count as reserves. It also dropped a plan to let issuers slow redemptions under stress. Instead, an issuer must alert the OCC within 24 hours if holders ask to redeem more than 10% of its outstanding tokens. Reserves must still back every token at least one for one.
The closely watched question of yield stayed open. The law bars issuers from paying interest, but the OCC removed a proposed provision that would have barred exchanges and other platforms from paying rewards on idle balances. It will judge such programs case by case, CoinDesk reported, with no safe harbor for existing ones, and suggested that a reward paid "at least in part, for other reasons" may fall outside the ban.
Why it matters
Markets took that as a win for crypto firms. Circle rose 6% to $90.65, Coinbase 5% and Strategy 8% in afternoon trading, 24/7 Wall St. reported. Banks objected: American Bankers Association chief Rob Nichols said the OCC stablecoin rule "will preserve the status quo for crypto platforms," and TD Cowen's Jaret Seiberg wrote that the Supreme Court may ultimately need to decide which yield payments are legal.
The rule is the first of several. The Treasury is writing its own pieces, as we covered in our GENIUS Act issuance rule report, and the Fed is handling bank subsidiaries, as in our Fed GENIUS stablecoin subsidiary applications piece.
What's next
Regulators expect a wave of applications once the regime starts in January, Yahoo Finance said. The agency's own summary is on the OCC website.
Total stablecoin supply stood at $301.3 billion on Oct. 21, according to Stablecoin Beat. On Polymarket, stablecoins reaching $500 billion before 2027 was priced at 3% as of 08:21 MSK on Oct. 22. The OCC stablecoin rule opens the door, but growth will take longer than ten weeks.
The call
We call that total stablecoin market capitalisation will NOT reach $500 billion before Jan. 1, 2027. Polymarket puts that outcome at 97%. Supply is about $301 billion, so it would need to grow by about two-thirds in ten weeks, and the new federal regime does not start until Jan. 18.
This article is for information only and is not investment advice. Calls are editorial forecasts, logged with market odds at the time of publication and kept on the record.