Payment stablecoin issuers must adhere to new custody and redemption standards starting Jan 18, 2027, after a ruling by the US banking regulator. The Office of the Comptroller of the Currency established the risk management framework under the GENIUS Act, banning issuers from paying yields solely for the holding or use of tokens. While the OCC dropped a proposed presumption against certain third-party rewards, it provided no automatic safe harbor for existing programs at firms such as Coinbase, PayPal, and Kraken, leaving those arrangements to case-by-case review.
The rule was delivered ahead of schedule to support the administration’s goal of growing the digital currency economy. Current payment stablecoin supply is $301B, led by Tether at $183B and Circle at $72B, with the GENIUS Act requiring these assets to be backed 1:1 by cash, short-term Treasuries, or repos. The final rule follows a period of industry advocacy, including calls from the Blockchain Association to keep validators and self-custody wallets outside the scope of Treasury’s related regulations.