US bank regulator finalises stablecoin rules, easing reserve demands and dropping a yield test

America's national bank regulator has written its final rules for the stablecoin issuers it will oversee. The Office of the Comptroller of the Currency, which charters and supervises national banks, published them on 21 October. Stablecoins are tokens meant to be redeemable one for one for dollars. The rules carry out the GENIUS Act, the federal stablecoin law passed last year. They cover the issuers that will answer to the agency, including foreign ones, and some custody work by the banks it supervises. They take effect, with the law, on 18 January 2027.

The biggest changes from the agency's draft, published earlier this year, are in the reserves. Issuers must pay out within two business days of a request to redeem. The draft set out its tests for the reserves in two versions: as firm minimums, or as a safe harbour that an issuer could choose to meet. The final rule makes some of them firm, and lighter. At least 5% of reserves must sit in deposits payable on demand or at the Federal Reserve, down from 10% in the draft. A test requiring 30% to be available within five business days has gone. So has a 20-day cap on the average maturity of the portfolio. The agency says its stress-testing and other liquidity rules do that job instead. A 40% limit on exposure to any one counterparty survives, with exceptions.

The other change concerns interest. The law bars issuers from paying holders interest or yield simply for holding a coin. The draft would have presumed a breach whenever an issuer paid an affiliate or partner that in turn paid holders a return. The final rule drops that presumption. The ban itself stays, and applies equally to retail and institutional holders. But the agency says a payment made through an intermediary may or may not be made solely for holding a coin, and it will judge each arrangement on its facts. Payments tied to transactions are not banned if they do not amount to interest. An arrangement set up to evade the ban would still breach it.

That matters most to banks, which fear that stablecoins paying a return will draw money out of their deposits. American Banker reported that banking groups have cited an estimate from a Treasury advisory committee that $6.6tn of deposits could leave banks. Ledger Insights, a trade publication, said the real surprise was the light touch on reserves. In theory, it noted, an issuer could keep 5% in cash and the rest in Treasury bills maturing within 93 days.

"We are providing a clear, practical framework for payment stablecoin innovation, with strong standards for reserve backing, redemption, and risk management," said Jonathan Gould, the Comptroller. Several pieces are still missing. The agency will say in a separate announcement when it starts taking applications. Rules on money laundering and sanctions will follow in a separate rulemaking, written with the Treasury. The agency received about 328 comments on its draft and says it will adjust the rules as the industry develops. The Federal Reserve proposed its own rules for the issuers it supervises in September.