OCC released proposed GENIUS stablecoin framework

OCC, the US national banking regulator, just released it proposed GENIUS stablecoin framework. Key takeaways:

1️⃣ Permitted Activities

Issuers may:

- Issue and redeem payment stablecoins

- Manage reserve assets

- Provide custody for stablecoins and reserves

- Act as principal or agent with respect to payment stablecoins

- Engage only in activities that directly support these functions

2️⃣ Custody Safeguards

Only “eligible financial institutions” may hold reserve assets.

These institutions must:

- Be appropriately supervised (Federal or qualifying State)

- Comply with custody segregation standards

- Enter formal custody agreements

- Maintain policies ensuring compliance with statutory safeguards

3️⃣ Capital Framework

The OCC proposes a three-part framework:

- $5 million minimum capital floor

- Additional operational backstop equal to 12 months of operating expenses, estimated at 0.40% of outstanding stablecoins

- During the first three years after licensing or chartering OCC sets a monetary capital amount individually

The OCC largely imports the bank capital instrument framework (Part 3) for definitions and eligibility, particularly for uninsured national trust banks.

➡️ Key Takeaway

A national trust bank charter looks like the cleanest pathway for crypto-native firms seeking institutional adoption and deeper integration with traditional financial infrastructure.

Under the National Bank Act (12 U.S.C. § 24(Seventh)), national banks are already authorized to provide fiduciary and custodial services as part of the “business of banking.” 

Without a national charter, issuers may need to layer state trust approval,

SEC custody qualification (where applicable) and money transmission licenses.

No wonder every digital asset firm with stablecoin ambitions are applying for a national bank charter from the OCC.

Here are the current application/approval pipeline:

Payoneer - application submitted

Crypto.com - received conditional approval

Circle - received conditional approval

Bridge - received conditional approval

Ripple - received conditional approval

BitGo - received conditional approval

Paxos - received conditional approval

Fidelity Digital Assets - received conditional approval

You can access a deeper dive of the document's stance on stablecoin yield here.

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