Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency

Issuing agencies

Abstract

The Office of the Comptroller of the Currency (OCC) is issuing regulations implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act regarding the issuance of payment stablecoins and certain related activities by entities subject to the OCC's jurisdiction.

Full Text

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<title>Federal Register, Volume 91 Issue 204 (Friday, October 23, 2026)</title>
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[Federal Register Volume 91, Number 204 (Friday, October 23, 2026)]
[Rules and Regulations]
[Pages 67000-67194]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21706]



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Vol. 91

Friday,

No. 204

October 23, 2026

Part III





Department of the Treasury





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Office of the Comptroller of the Currency





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12 CFR Parts 3, 6, et al.





Implementing the Guiding and Establishing National Innovation for U.S. 
Stablecoins Act for the Issuance of Stablecoins by Entities Subject to 
the Jurisdiction of the Office of the Comptroller of the Currency; 
Final Rule

Federal Register / Vol. 91 , No. 204 / Friday, October 23, 2026 / 
Rules and Regulations

[[Page 67000]]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 3, 6, 8, 15, and 19

[Docket ID OCC-2025-0372]
RIN 1557-AF41


Implementing the Guiding and Establishing National Innovation for 
U.S. Stablecoins Act for the Issuance of Stablecoins by Entities 
Subject to the Jurisdiction of the Office of the Comptroller of the 
Currency

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is issuing 
regulations implementing the Guiding and Establishing National 
Innovation for U.S. Stablecoins Act regarding the issuance of payment 
stablecoins and certain related activities by entities subject to the 
OCC's jurisdiction.

DATES: The final rule is effective on January 18, 2027.

FOR FURTHER INFORMATION CONTACT: Sarah Turney, Assistant Director, 
Henry Barkhausen, Special Counsel, Kevin Korzeniewski, Special Counsel, 
Mark O'Horo, Special Counsel, Daniel Borman, Counsel, or Collin Berger, 
Attorney, Chief Counsel's Office, 202-649-5490, Office of the 
Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. 
If you are deaf, hard of hearing, or have a speech disability, please 
dial 7-1-1 to access telecommunications relay services.

SUPPLEMENTARY INFORMATION:

I. Background and Summary of the Final Rule

    The Guiding and Establishing National Innovation for U.S. 
Stablecoins Act (12 U.S.C. 5901 et seq.) (GENIUS Act or the Act) was 
enacted on July 18, 2025. The Act establishes a regulatory framework 
for payment stablecoin activities.\1\ Stablecoins are digital assets, 
i.e., digital representations of value recorded on a cryptographically 
secured distributed ledger,\2\ such as a blockchain.\3\ The Act sets 
forth various regulatory and licensing requirements for permitted 
payment stablecoin issuers and foreign payment stablecoin issuers. In 
many instances, the Act states that the specific requirements 
applicable to these entities (e.g., those related to capital, 
liquidity, or operational risk management) will be established by 
regulations issued by the relevant primary Federal payment stablecoin 
regulator, in coordination with other relevant agencies, as 
appropriate.\4\ On March 2, 2026, the OCC issued a notice of proposed 
rulemaking (proposal or proposed rule) proposing, and seeking comment 
on, the regulations that would apply to permitted payment stablecoin 
issuers and foreign payment stablecoin issuers under the OCC's 
jurisdiction (including subsidiaries of insured national banks or 
Federal savings associations, Federal qualified payment stablecoin 
issuers, certain nonbank State qualified payment stablecoin issuers, 
and foreign payment stablecoin issuers) as well as certain custody 
activities conducted by OCC-supervised entities.\5\
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    \1\ Under section 2(22) of the Act (12 U.S.C. 5901(22)), 
``payment stablecoin'' means ``a digital asset--(i) that is, or is 
designed to be, used as a means of payment or settlement; and (ii) 
the issuer of which--(I) is obligated to convert, redeem, or 
repurchase for a fixed amount of monetary value, not including a 
digital asset denominated in a fixed amount of monetary value; and 
(II) represents that such issuer will maintain, or create the 
reasonable expectation that it will maintain, a stable value 
relative to the value of a fixed amount of monetary value[.]'' The 
term does not include a digital asset that is (i) a national 
currency; (ii) a deposit (as defined in 12 U.S.C. 1813), including a 
deposit recorded using distributed ledger technology; or (iii) a 
security, as defined in 15 U.S.C. 77b, 78c, or 80a-2.
    \2\ 12 U.S.C. 5901(6).
    \3\ White House, ``Strengthening American Leadership in Digital 
Financial Technology,'' at 15 (July 17, 2025), (hereinafter, Digital 
Financial Technology Report), <a href="https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/07/Digital-Assets-Report-EO14178.pdf</a>. A 
cryptographically secured ledger uses cryptography to maintain the 
integrity of the ledger. See also E.O. No. 14178, Strengthening 
American Leadership in Digital Financial Technology, 90 FR 8647 
(January 31, 2025) (defining blockchain to mean ``any technology 
where data is: (i) shared across a network to create a public ledger 
of verified transactions or information among network participants; 
(ii) linked using cryptography to maintain the integrity of the 
public ledger and to execute other functions; (iii) distributed 
among network participants in an automated fashion to concurrently 
update network participants on the state of the public ledger and 
any other functions; and (iv) composed of source code that is 
publicly available'').
    \4\ See, e.g., 12 U.S.C. 5903(a)(4), (b), (h).
    \5\ See Implementing the Guiding and Establishing National 
Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins 
by Entities Subject to the Jurisdiction of the Office of the 
Comptroller of the Currency, 91 FR 10202 (March 2, 2026).
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    The OCC received approximately 328 comments in response to the 
proposal from a wide variety of commenters, including crypto-focused 
companies, trade groups, banks, non-profit organizations, academics, 
and individuals.\6\ Commenters had diverging views on several of the 
proposal's key provisions. The final rule addresses these comments, as 
discussed below. However, as discussed in the proposal, the OCC 
anticipates that these implementing regulations will be updated, as 
necessary, in the years following the effective date of the GENIUS Act 
as the business practices of permitted payment stablecoin issuers and 
foreign payment stablecoin issuers continue to evolve and develop and 
the OCC gains experience regulating and supervising permitted payment 
stablecoin issuers. Likewise, the OCC will supplement this final rule 
with guidance documents, as appropriate. As is its practice in other 
areas, the OCC will continue to track market developments and meet with 
interested parties to discuss the regulation and supervision of 
permitted payment stablecoin issuers, foreign payment stablecoin 
issuers, national banks, Federal savings associations, and Federal 
branches under the final rule in the coming years to understand the 
application of the rule in practice. At a high level, many commenters 
held differing views with respect to the proposal's approach concerning 
reserve asset management, liquidity, and diversification; the 
prohibition against a permitted payment stablecoin issuer paying 
interest or yield to a payment stablecoin holder solely in connection 
with the holding, use, or retention of such payment stablecoin (yield 
prohibition); redemption; and the proposal's capital requirements.
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    \6\ Although the comment period closed on May 1, 2026, the OCC 
continued to accept and consider late comments until July 1, 2026.
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    With respect to reserve asset management, liquidity, and 
diversification, commenters differed as to how prescriptive the final 
rule should be. Several commenters advocated setting principles-based 
requirements, either with or without a quantitative safe harbor 
concerning diversification requirements, and making certain changes to 
the proposed quantitative diversification safe harbor. Other commenters 
advocated for more prescriptive and quantitative reserve asset 
management, liquidity, and diversification requirements.
    Many commenters opposed the proposal's approach with respect to the 
yield prohibition. The proposal included a rebuttable presumption that 
would have presumed certain transactions with affiliates and related 
third parties violated the prohibition. Many commenters generally 
favored a strong prohibition that would address a permitted payment 
stablecoin issuer using a third party to pay interest or yield. Of 
these commenters, several favored broadening the rebuttable 
presumption. Others said that a presumption was inadequate, and certain 
transactions that implicated indirect payments should be

[[Page 67001]]

conclusively prohibited. In contrast, many commenters advocated for a 
narrow prohibition and either eliminating or narrowing the rebuttable 
presumption. Many of these commenters voiced concerns that the proposed 
rebuttable presumption could capture certain payments to related third 
parties that were not made solely in connection with the holding, use, 
or retention of payment stablecoin.
    Concerning redemption, many commenters argued against imposing a 
freeze on (or extension of) redemption when there is a spike in 
redemption requests. Commenters argued that including these types of 
provisions could accelerate a run. With respect to capital, many 
commenters generally favored the flexible approach afforded by the 
proposed rule. Nevertheless, other commenters advocated a more 
quantitative and standardized approach. Commenters also addressed 
several other issues, including definitions; permitted activities; 
redemption; risk management; audits, reports, and supervision; State 
issuers; custody; foreign issuers; applications and registration 
requirements, among other issues. Each of these subjects is addressed 
in greater detail below.
    Commenters also provided input concerning requirements relating to 
Bank Secrecy Act/Anti-Money Laundering (BSA/AML) and sanctions evasion. 
These comments will be addressed in a separate rulemaking.\7\ Likewise, 
some comments on that separate rulemaking are best addressed in this 
final rule. Some commenters stated that the OCC should delay finalizing 
the rule due to uncertainties in stablecoin markets, ongoing 
legislative efforts, the complexity of the Act and rule, or to 
facilitate issuance of a joint rule.\8\ Some commenters requested that 
the OCC re-propose any aspects that are inconsistent with the proposals 
of other agencies that issue rules under the GENIUS Act. The GENIUS Act 
will be effective on January 18, 2027, and it is important that the 
OCC's implementing regulations be effective as of that date. With 
respect to legislation, the OCC will revise the final rule, as 
appropriate, in response to any enacted legislation impacting the OCC's 
implementation of the GENIUS Act.
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    \7\ See Permitted Payment Stablecoin Issuer Anti-Money 
Laundering/Countering the Financing of Terrorism and Sanctions 
Compliance Risk Management, 91 FR 37840 (June 24, 2026). On December 
8, 2025, the OCC received a petition for regulatory action from 
Peter Tang at Stablecoin Standards Authority requesting (1) clear, 
risk-based supervisory expectations for national banks that 
participate in payment stablecoin activities with the GENIUS 
framework, (2) consistent application of Federal standards to large 
offshore U.S.-dollar referenced stablecoin arrangements with a 
material United States nexus, and (3) a targeted rulemaking to 
ensure that stablecoin settlement infrastructure is identifiable and 
subject to ongoing compliance accountability through on-chain node 
KYC and a Federally administered node registry. The OCC is 
addressing BSA/AML provisions of the GENIUS Act in a separate 
rulemaking, and the proposal related to that separate rulemaking was 
published in the Federal Register on June 24, 2026. The OCC is 
issuing the final rule consistent with the GENIUS Act and denies 
Stablecoin Standards Authority's petition for a separate rulemaking 
given the BSA/AML proposal.
    \8\ On September 9, 2024, the OCC received a petition for 
rulemaking from Dmitry Shkipin at <a href="http://HomeOpenly.com">HomeOpenly.com</a> requesting that the 
OCC repeal OCC Interpretive Letters 1170 (July 22, 2020), 1172 
(September 21, 2020), and 1174 (January 4, 2021). The petition 
asserts that virtual currencies are unlawful. The OCC is issuing the 
final rule consistent with the GENIUS Act and denies 
<a href="http://HomeOpenly.com">HomeOpenly.com</a>'s petition for a rulemaking because these activities 
are lawful, as explained in the letters, and because many of the 
stablecoin activities permissible under OCC Interpretive Letters 
1170, 1172, and 1174 were expressly affirmed by the GENIUS Act.
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    In addition, several commenters requested an extension of the 
comment period or to avoid finalizing the rule until certain 
legislative clarity was provided or to ensure that the effective date 
of the Act would be no sooner than January 18, 2027. Commenters also 
raised concerns regarding interagency coordination and advocated for 
ensuring that there is alignment among the rules issued by the agencies 
tasked with implementing the GENIUS Act. Balancing the need to have 
final rules implementing the GENIUS Act in advance of the statutory 
effective date against commenters' desire for additional time to 
comment on the proposal, the OCC elected not to extend the comment 
period but did accept and consider comments submitted after the close 
of the formal comment period. With respect to interagency coordination, 
the OCC has coordinated closely with the other Federal agencies 
consistent with section 13 of the GENIUS Act. The OCC has taken 
seriously its obligation to coordinate with other agencies, as 
appropriate, and does not believe that it is necessary to do so through 
a joint rule. The OCC will continue to coordinate appropriately.
    Commenters provided suggestions on amendments to regulations that 
should be made in coordination with the GENIUS Act rulemaking. For 
example, a few commenters noted that the OCC should coordinate with the 
other Federal banking agencies to amend the standardized bank capital 
and liquidity requirements to provide for appropriate treatment for 
payment stablecoins and reserve assets, including that because reserve 
assets are not available to meet the obligations of a parent entity of 
a permitted payment stablecoin issuer, they should not be included in 
parent-level capital and liquidity requirements. Other commenters 
stated that the agencies implementing the GENIUS Act should revise 
their liquidity rules to accommodate the GENIUS Act framework, 
including the liquidity coverage ratio and net stable funding ratio. 
These comments are beyond the scope of this rulemaking, and the final 
rule therefore does not revise existing regulations to address them.
    Several commenters raised other issues that are also beyond the 
scope of this rulemaking. Some commenters requested that the OCC apply 
certain other statutes to permitted payment stablecoin issuers by rule. 
The OCC has not done so in this final rule. The scope of statutes that 
apply to permitted payment stablecoin issuers cannot change by 
regulation. Thus, the final rule neither subjects permitted payment 
stablecoin issuers to statutes that would not otherwise apply nor 
excludes them from the scope of statutes that do apply to their 
activities. Some commenters stated that the OCC should coordinate with 
the Board of Governors of the Federal Reserve System (Federal Reserve) 
concerning designation of certain permitted payment stablecoin issuers 
as systemically important. Such designation is beyond the scope of this 
rulemaking, and therefore the final rule does not address such 
designations. In addition, one commenter requested that the OCC address 
the tax treatment of payment stablecoins. This issue is outside the 
scope of this rule and the OCC's authority and is not addressed in the 
final rule. Likewise, some commenters brought up antitrust concerns 
that are outside the scope of this rulemaking. Some commenters raised 
issues concerning non-payment stablecoins, decentralized finance 
(DeFi),\9\ and crypto-assets more broadly that also fall outside the 
scope of this rulemaking.
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    \9\ DeFi generally refers to the use of blockchain technology to 
provide financial services on a peer-to-peer basis. Digital 
Financial Technology Report at 20.
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    Many commenters suggested that the OCC apply various existing 
consumer protection laws and regulations to permitted payment 
stablecoin issuers. For example, several commenters pointed to Unfair, 
Deceptive, or Abusive Acts or Practices (UDAAP) pursuant to section 
1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(12 U.S.C. 5531), Unfair or Deceptive Acts or Practices (UDAP) under 
section 5 of the Federal Trade

[[Page 67002]]

Commission Act (15 U.S.C. 45), the Electronic Fund Transfer Act of 1978 
(15 U.S.C. 1693 et seq.) (EFTA), the Truth in Lending Act of 1968 (15 
U.S.C. 1601 et seq.) (TILA), and the Gramm-Leach-Bliley Act (15 U.S.C. 
6801 et seq.) (GLBA) as existing consumer protection laws that should 
apply to permitted payment stablecoin issuers. Commenters argued that 
consumers should not receive different protections based solely on the 
technological form of a payment instrument. Some commenters suggested 
that new consumer protection requirements for permitted payment 
stablecoin issuers should be drafted rather than simply applying 
existing statutes and regulations. For example, a few commenters 
suggested that consumer protection should be addressed in the 
application and supervisory framework under the GENIUS Act. A few 
commenters suggested that permitted payment stablecoin issuers should 
be required to maintain frameworks for managing risks arising from 
redemption failures, misleading disclosures, or inadequate customer 
communication. Other commenters suggested that, in addition to 
traditional fraud risks, specific operational risks such as transaction 
delays, rejections, and account restrictions should be addressed in the 
case of permitted payment stablecoin issuers. In contrast, a few 
commenters argued that consumer protection currently has its own 
regulatory framework and should not be duplicated. It would be outside 
the scope of this rulemaking to opine on all the statutes that may be 
applicable to permitted payment stablecoin issuers. The OCC's final 
rule does not alter the scope of the consumer protection laws that 
apply to permitted payment stablecoin issuers.
    Several commenters also requested that the OCC take additional 
action to clarify the treatment of reserve assets upon an issuer's 
insolvency. For example, commenters suggested that the rule clarify 
that reserve assets are held for the benefit of the holders of the 
issuer's payment stablecoin or that the assets are not assets of the 
issuer's estate. Another commenter suggested that the OCC rely on its 
fiduciary rulemaking powers to require that reserve assets be held in a 
statutory trust or other equivalent legal structure. As discussed in 
greater detail below, the OCC has made changes in the final rule to 
accommodate certain structures, including the use of special purpose 
vehicle (SPV) issuers designed to protect the rights of payment 
stablecoin holders.
    One commenter emphasized that it is appropriate to recognize the 
United States Federal framework already applicable to foreign banks' 
United States presence when operationalizing the permitted payment 
stablecoin framework. Although the International Banking Act of 1978 
(12 U.S.C. 3101 et seq.) applies to the United States operations of 
foreign banks, the GENIUS Act includes additional, specific 
requirements related to foreign issuers of payment stablecoins in the 
United States.
    The OCC is adopting this final rule with certain modifications from 
the proposal in light of the comments received. At a high level, the 
final rule makes several changes to the provisions concerning reserve 
asset management. These changes provide more flexibility to permitted 
payment stablecoin issuers while still maintaining core liquidity, 
diversification, and concentration requirements to ensure that 
permitted payment stablecoin issuers remain sufficiently reserved and 
capable of meeting redemption requests in a timely manner. The final 
rule provides additional clarity with respect to a permitted payment 
stablecoin issuer's permitted activities, redemption requirements, and 
risk management obligations. It also includes clarifications concerning 
the OCC's supervision of permitted payment stablecoin issuers, custody, 
and licensing and registration. In addition, the final rule includes 
capital and operational backstop requirements that are more detailed 
than, but consistent with, the proposal. The capital elements have also 
been simplified relative to the proposal. The final rule, like the 
proposal, imposes requirements consistent with the GENIUS Act that are 
tailored to the business model and risk profile of permitted payment 
stablecoin issuers. For example, as described below, the agency is 
implementing flexible risk management standards in Sec.  15.13 that 
scale based on the nature, scope, and risk of a permitted payment 
stablecoin issuer's activities. Consistent with certain comments 
received on the proposal, the final rule facilitates an approach to 
supervision that focuses on activities over institution type.
    In addition, other regulations beyond those addressed in this 
rulemaking may need to be updated in light of the passage of the GENIUS 
Act. For example, the OCC intends to incorporate references to 
permitted payment stablecoin issuers and foreign payment stablecoin 
issuers, as appropriate, into 12 CFR part 4 \10\ and is considering 
updates to 12 CFR part 28.
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    \10\ See OCC Rules Regarding the Availability of OCC 
Information, 91 FR 50610 (August 5, 2026).
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    These implementing regulations will be effective on January 18, 
2027.

A. Self-Executing Provisions

    The proposal discussed certain self-executing provisions of the 
GENIUS Act but did not propose rule text for these self-executing 
provisions.\11\ For example, the Act includes several provisions 
addressing the applicability of State law to permitted payment 
stablecoin issuers. Specifically, section 4(b)(1) of the GENIUS Act (12 
U.S.C. 5903(b)(1)) states that, notwithstanding certain Federal law 
addressing preemption standards for OCC-regulated institutions,\12\ and 
certain State laws, a Federal qualified payment stablecoin issuer 
``shall be licensed, regulated, examined, and supervised exclusively by 
the Comptroller.'' This provision provides the OCC with the exclusive 
authority to exercise visitorial powers with respect to Federal 
qualified payment stablecoin issuers, consistent with the agency's 
authority in 12 U.S.C. 484.\13\ This exclusivity generally prevents 
other regulators from subjecting these entities to additional 
oversight, which can be unduly burdensome, duplicative, or 
inconsistent.\14\ In addition, based on the exclusivity granted to the 
OCC, section 4(b) of the Act preempts certain State laws with respect 
to Federal qualified payment stablecoin issuers.
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    \11\ 91 FR at 10203-04.
    \12\ Specifically, 12 U.S.C. 25b and 1465 respectively address 
the preemption standards applicable to national banks and Federal 
savings associations and their subsidiaries.
    \13\ Although the GENIUS Act does not specifically use the term 
``visitorial powers,'' its plain language is consistent with the 
Supreme Court's description of visitorial authority. See Cuomo v. 
Clearing House Ass'n, L.L.C., 557 U.S. 519, 526 (2009) (describing 
visitation as the exercise of ``general supervision'') (emphasis 
added); see also 12 CFR 7.4000(a)(2) (describing the OCC's 
visitorial powers with respect to national banks).
    \14\ Twelve U.S.C. 484 would also continue to apply to uninsured 
national banks and Federal branches that become permitted payment 
stablecoin issuers.
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    Section 5(h) of the GENIUS Act (12 U.S.C. 5904(h)) expressly 
preempts ``any State requirement for a charter, license, or other 
authorization to do business with respect to a Federal qualified 
payment stablecoin issuer or [a] subsidiary of an [OCC-regulated] 
insured depository institution . . . that is approved . . . to be a 
permitted payment stablecoin issuer.'' As a result, these entities are 
only required to obtain authorization to do business from the OCC, 
which reduces the complexity that

[[Page 67003]]

would result from requiring these entities to also obtain a charter, 
license, or other authorization from one or more States.\15\ Finally, 
section 7(f)(4) of the GENIUS Act (12 U.S.C. 5906(f)(4)) provides that 
nothing in the GENIUS Act preempts State consumer protection laws.\16\
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    \15\ See also Section 4(b)(1) (12 U.S.C. 5903(b)(1)).
    \16\ Depending on the circumstances, other Federal law, such as 
the National Bank Act and the Home Owners' Loan Act, may also be 
relevant in assessing the applicability of State law, including a 
State consumer protection law, to certain permitted payment 
stablecoin issuers, such as uninsured national banks.
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    Together, these GENIUS Act provisions establish a framework for 
assessing the applicability of State law to a Federal qualified payment 
stablecoin issuer or a subsidiary of an OCC-regulated insured 
depository institution approved to be a permitted payment stablecoin 
issuer.\17\
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    \17\ The GENIUS Act also addresses the applicability of State 
law to State qualified payment stablecoin issuers. See, e.g., 
section 7(f) of the Act (12 U.S.C. 5906(f)).
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    The OCC received several comments on these self-executing 
provisions. Some commenters requested that the OCC more specifically 
address whether the GENIUS Act preempts licensing requirements in 
certain circumstances (e.g., when third parties provide services to 
certain permitted payment stablecoin issuers, when a foreign payment 
stablecoin issuer is authorized to issue stablecoins in the U.S., or 
when a Federal qualified payment stablecoin issuer or subsidiary of an 
OCC-regulated insured depository institution engages in activities 
other than those addressed in section 4(a)(7)(A) (12 U.S.C. 
5903(a)(7)(A)). Commenters also recommended that the OCC state that it 
has exclusive visitorial powers over subsidiaries of insured national 
banks that are permitted payment stablecoin issuers, similar to the 
proposal's statement regarding the OCC's exclusive visitorial powers 
for Federal qualified payment stablecoin issuers. With respect to State 
consumer protection laws, commenters had several suggestions, including 
that the OCC specifically address compliance with applicable State 
consumer protection laws in its final regulation. Commenters also 
recommended that the OCC further explain how it will approach certain 
preemption issues.
    After carefully considering the comments received, the OCC 
determined that the issues raised by commenters do not require 
regulatory changes, are outside the scope of this rulemaking, or are 
better evaluated on an individualized basis. The section of the 
preamble to the proposal discussing these self-executing provisions was 
intended to provide stakeholders with a general understanding of the 
GENIUS Act's preemption and visitation framework. Because this 
framework is self-executing, however, the OCC did not propose any 
implementing regulation text, nor is it including any in the final 
rule. While commenters raised several interpretive issues that may 
warrant clarification at the appropriate time, the OCC has concluded 
that the agency should retain the flexibility to address such issues as 
they arise. This will ensure that the OCC's analysis is appropriately 
informed by, and tailored to, the relevant facts and circumstances. 
Stakeholders may contact the OCC with questions as they arise, and the 
OCC will provide additional clarification if appropriate.\18\
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    \18\ At least one commenter observed that the proposal did not 
explain how the OCC will comply with 12 U.S.C. 25b, which imposes 
procedural requirements on certain OCC preemption actions. The OCC 
has complied, and will continue to comply, with all applicable legal 
requirements.
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    Among other self-executing provisions, section 4(g) of the GENIUS 
Act (12 U.S.C. 5903(g)) provides that a Federal savings association 
established under the Home Owners' Loan Act (12 U.S.C. 1461 et seq.) 
that holds a reserve that satisfies the requirements of section 4(a)(1) 
of the GENIUS Act shall not be required to satisfy the qualified thrift 
lender test under section 10(m) of the Home Owners' Loan Act (12 U.S.C. 
1467a(m)) \19\ with respect to such reserve assets. Because this 
provision is self-executing, the OCC did not propose regulatory text to 
implement section 4(g). The OCC received no comments on this aspect of 
the Act and, consistent with the proposal, is not including any 
regulatory text to implement section 4(g) of the Act.
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    \19\ A Federal savings association is generally required to be a 
qualified thrift lender. A Federal savings association is a 
qualified thrift lender if it meets one of the following qualified 
thrift lender tests: (1) it qualifies as a domestic building and 
loan association as defined in 26 U.S.C. 7701(a)(19); or (2) its 
qualified thrift investments equal or exceed 65 percent of its 
portfolio assets, and its qualified thrift investments continue to 
equal or exceed 65 percent of its portfolio assets on a monthly 
average basis in nine out of every 12 months.
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II. Description of the Final Rule

    The final rule, like the proposal, addresses the majority of the 
OCC's implementation of the GENIUS Act through new 12 CFR part 15. In 
addition, like the proposal, the final rule makes updates to 12 CFR 
parts 3 (Capital Adequacy Standards), 6 (Prompt Corrective Action), 8 
(Assessment of Fees), and 19 (Rules of Practice and Procedure). For 
each subpart, or substantive subsection, of 12 CFR part 15, an overview 
of the changes from the proposed rule to the final rule is provided, 
followed by a detailed description of the proposed rule, relevant 
comments, and final rule.

A. Subpart A--Purpose, Scope, Definitions, Severability, and 
Reservation of Authority

    Consistent with the proposal, subpart A of 12 CFR part 15 provides 
the purpose and scope and defines terms used throughout the final rule.
1. Overview of Changes From Proposed Rule to Final Rule for Subpart A
    As described below, the OCC is adopting Sec.  15.1, which provides 
the scope and purpose of part 15, as proposed.
    The OCC is adopting many of the part 15 definitions in Sec.  15.2 
as proposed, but several definitions are being added, removed, or 
changed. The agency is adopting the following definitions as proposed: 
affiliate, Bank Secrecy Act, control, deposit, digital asset, director, 
distributed ledger, executive officer, fair value, FDIC, Federal 
branch, Federal qualified payment stablecoin issuer, Federal Reserve, 
foreign payment stablecoin issuer, GAAP, immediate family, insider, 
insured credit union, insured depository institution, monetary value, 
money, national currency, nonbank entity, OCC, payment stablecoin, 
permitted payment stablecoin issuer, person, principal shareholder, 
publicly available information, registered public accounting firm, 
related interest, reserve asset, Stablecoin Certification Review 
Committee, State, State payment stablecoin regulator, and subsidiary. 
The agency is adding to Sec.  15.2 new definitions for business day, 
payment stablecoin holder, reserve asset value, sensitive customer 
information, share account, and tokenized form. Additionally, the 
agency is removing from Sec.  15.2 the definitions of distributed 
ledger protocol, State-chartered depository institution, and trading 
volume.
    The agency is finalizing the following Sec.  15.2 definitions with 
differences from the proposed definitions: board of directors, 
customer, depository institution, eligible financial institution, 
nonpublic personal information, outstanding issuance value, private 
key, State qualified payment stablecoin issuer, and United States 
customer.
    As described below, the OCC is adopting Sec.  15.3, providing for 
the severability of part 15 provisions, as proposed.

[[Page 67004]]

    The OCC is adding Sec.  15.4 on the reservation of authority that 
was not in the proposed rule.
2. Purpose and Scope (Sec.  15.1)
    Proposed Sec.  15.1 set forth the purpose and scope of the 
stablecoin-related regulations. Paragraph (a) described the purpose, 
which is to implement the GENIUS Act, 12 U.S.C. 5901 et seq., with 
respect to entities for which the OCC is authorized to issue 
regulations or exercise its enforcement authority under the Act. These 
entities were listed in the proposed scope provision in paragraph (b), 
which provided that proposed part 15 would apply to activities related 
to payment stablecoins and certain custody activities of (1) national 
banks and their subsidiaries; (2) Federal savings associations and 
their subsidiaries; (3) Federal branches and their subsidiaries; (4) 
foreign payment stablecoin issuers; (5) nonbank entities that seek to 
be or are approved as Federal qualified payment stablecoin issuers; and 
(6) State qualified payment stablecoin issuers for whom the OCC has 
regulatory or enforcement authority pursuant to proposed Sec.  15.15 or 
Sec.  15.16. Thus, except where otherwise noted, references in part 15 
to permitted payment stablecoin issuers would only apply to these types 
of listed entities despite the broader scope of the term in the GENIUS 
Act.
    As described in the section-by-section analysis below, proposed 
subparts B and E would apply to permitted payment stablecoin issuers 
that are subsidiaries of insured national banks, subsidiaries of 
Federal savings associations, uninsured national banks, Federal 
branches or subsidiaries thereof, nonbank entities that are not State 
qualified payment stablecoin issuers, and State qualified payment 
stablecoin issuers for which the OCC has regulatory or enforcement 
authority. Proposed subpart C would apply to national banks, Federal 
savings associations, Federal branches, Federal qualified payment 
stablecoin issuers, and State qualified payment stablecoin issuers with 
a total consolidated outstanding issuance value of more than $10 
billion subject to supervision and regulation by the OCC that provide 
custodial or safekeeping services for payment stablecoins, reserve 
assets, and other ``covered assets'' (described in detail in subpart 
C). The application and registration sections in proposed subpart D 
would apply to insured national banks, Federal savings associations, or 
Federal branches that seek to issue payment stablecoins through a 
subsidiary; nonbank entities that seek to be Federal qualified payment 
stablecoin issuers, uninsured national banks, and uninsured Federal 
branches that seek to be Federal qualified payment stablecoin issuers; 
and entities that seek to register as foreign payment stablecoin 
issuers. The capital requirements detailed in proposed subpart E would 
apply to subsidiaries of insured national banks, subsidiaries of 
Federal savings associations, uninsured national banks, Federal 
branches or subsidiaries thereof, nonbank entities that are not State 
qualified payment stablecoin issuers, and State qualified payment 
stablecoin issuers for which the OCC has regulatory authority.
    Several commenters sought greater clarity about which entities 
would become subject to the proposed regulation because of their 
activities. These commenters were concerned that a broad scoping of 
stablecoin issuer activities and digital asset service provider 
activities might result in an overly broad set of entities becoming 
subject to the OCC's regulations, including entities engaged in 
blockchain infrastructure, technology-service providers, vendor support 
function providers, and companies that facilitate businesses' adoption 
of stablecoin technology. Related to this scope issue, one commenter 
suggested that the rule should require a standardized certification 
under Federal oversight for core service providers, which would alter 
the scope of entities affected by the rule. Several commenters 
suggested the OCC follow a regulatory approach based on the activity 
type and not the institution type. Commenters suggested such an 
approach increases fair competition and decreases the risk of 
regulatory arbitrage.
    The scope of the final rule is consistent with the text of the 
GENIUS Act and the OCC's jurisdiction. The OCC's part 15 applies to 
national banks and their subsidiaries, Federal savings associations and 
their subsidiaries, Federal branches and their subsidiaries, foreign 
payment stablecoin issuers, nonbank entities that seek to be or are 
approved as Federal qualified payment stablecoin issuers, and State 
qualified payment stablecoin issuers over which the OCC has regulatory 
or enforcement authority. To the extent that an entity falls under one 
of these categories, it is subject to part 15. Otherwise, the entity is 
not captured by the rule. Therefore, to the extent a blockchain 
infrastructure or technology service-provider issues a payment 
stablecoin and is a type of entity subject to the OCC's jurisdiction, 
it is covered under part 15. Additionally, entities that are covered 
custodians as that term is defined in subpart C of part 15 are also 
subject to part 15. Otherwise, part 15 does not apply.
    The OCC received no additional comments concerning proposed Sec.  
15.1 and is adopting Sec.  15.1, with one technical change. Paragraph 
(b)(6) of the proposed rule referred to State qualified payment 
stablecoin issuers for whom the OCC has regulatory or enforcement 
authority. The final rule replaces ``for whom'' with ``for which.''
3. Definitions (Sec.  15.2)
    Section 15.2 contains the following definitions of terms used 
throughout part 15, many of which are included in or based on the 
definitions in the GENIUS Act.\20\ A description of the proposed 
definitions, comments received, and final definitions is below.
---------------------------------------------------------------------------

    \20\ The definitions in Sec.  15.2 describe only terms used in 
part 15. These definitions do not interpret terms for purposes of 
any other statute or regulation and are not issued pursuant to 
section 3(d) of the GENIUS Act (12 U.S.C. 5902(d)).
---------------------------------------------------------------------------

    Acting in concert. The OCC did not propose to define ``acting in 
concert'' but requested comment on whether to do so, including whether 
to incorporate any of the presumptions for acting in concert under 12 
CFR 5.50. One commenter stated that the term did not need to be 
defined. Another recommended defining the term in a manner based on 12 
CFR 5.50. Another commenter stated that the definition should not be so 
broad as to inadvertently capture arm's-length commercial relationships 
between stablecoin issuers and their technology, custody, clearing, or 
compliance providers. Another commenter recommended adapting the 
definition in 12 CFR 5.50 to require knowing and purposeful 
coordination. The definition of ``acting in concert'' is pertinent to 
the definition of ``principal shareholder,'' which, in turn, is 
relevant to the definition of ``insider'' and to certain application 
requirements. The definition of ``principal shareholder'' is based on 
the definition in 12 CFR 5.20. The definition of ``insider'' is based 
on the definition in Regulation O (12 CFR 215). Both 12 CFR 5.20 and 
Regulation O use the terms ``acting in concert'' or ``acting through or 
in concert'' but do not define the terms. After considering the 
comments received, the OCC has concluded that it is unnecessary to 
define the term for purposes of 12 CFR part 15 because the term would 
serve the same purpose as in 12 CFR 5.20 and Regulation O, and the 
existing regulations are well established and understood. While the OCC 
is not defining the term for purposes of 12 CFR part 15, the OCC 
expects that any

[[Page 67005]]

person that would be deemed to be acting in concert for purposes of 12 
CFR 5.50 would also be acting in concert for purposes of Sec.  
15.14(m), which applies the requirements of 12 CFR 5.50 in the context 
of permitted payment stablecoin issuers. Because the term ``acting in 
concert'' serves a different purpose in 12 CFR part 15 than in 12 CFR 
5.50, the OCC has not, however, incorporated the definition in 12 CFR 
5.50 or incorporated any of the presumptions therein.
    Affiliate. The OCC proposed to define the term ``affiliate'' 
consistent with the definition in the Bank Holding Company Act, 12 
U.S.C. 1841(k), but modified to use the defined term ``person'' in 
place of the term ``company.'' Under the proposed rule, the term 
``affiliate'' would have meant a person that controls, is controlled 
by, or is under common control with another person.
    Commenters generally supported or did not opine on the definition 
of ``affiliate'' (but, as discussed below, the OCC did receive comments 
concerning the definition of control, which has implications for the 
definition of affiliate). The OCC is adopting the definition of 
affiliate as proposed. This approach aligns the definition with the 
definition in the Bank Holding Company Act with which market 
participants are generally familiar. As discussed in the proposal, the 
definition of ``affiliate'' is consistent with the definition in the 
Bank Holding Company Act, and the OCC generally expects that it will 
interpret questions regarding the definition of ``affiliate'' 
consistent with the provisions of 12 CFR part 225 as of the date of the 
issuance of this final rule.
    Bank Secrecy Act. The OCC proposed to define the term ``Bank 
Secrecy Act'' consistent with the definition provided in the GENIUS 
Act, 12 U.S.C. 5901(2). Under the proposal, the term ``Bank Secrecy 
Act'' would have meant: (1) section 21 of the Federal Deposit Insurance 
Act (12 U.S.C. 1829b); (2) chapter 2 of title I of Public Law 91-508 
(12 U.S.C. 1951 et seq.); and (3) subchapter II of chapter 53 of title 
31, United States Code and notes thereto (31 U.S.C. 5311 et seq.). The 
proposal added the phrase ``and notes thereto'' as a clarification. The 
OCC received no comments addressing the definition of ``Bank Secrecy 
Act.'' The OCC is adopting the definition as proposed.
    Board of directors. Under the proposed rule, ``board of directors'' 
would have meant a permitted payment stablecoin issuer's or applicant's 
board of directors or the group of individuals that serve the nearest 
equivalent function of acting as the governing body of the issuer or 
applicant. The proposed definition captured the persons responsible for 
certain requirements under proposed part 15, including for permitted 
payment stablecoin issuers that do not have a board of directors as 
that term is commonly understood. The OCC received no comments 
addressing the definition of ``board of directors.'' The OCC is 
adopting the definition with one technical change replacing ``serve'' 
with ``serves.''
    Business day. One commenter requested that the OCC clarify the 
meaning of ``business day,'' including whether Saturdays, Sundays, and 
national holidays are excluded, for purposes of the timely redemption 
requirement in Sec.  15.12. Alternatively, the commenter stated that 
the OCC could impose a requirement that issuers disclose how they 
calculate the two-business-day period under Sec.  15.12. To provide 
clarity, the OCC is defining ``business day'' to mean any day other 
than a Saturday, Sunday, or Federal holiday.
    Conspicuous. One commenter requested that the OCC define 
``conspicuous'' for purposes of relevant disclosures. The OCC declines 
to do so in this final rule because whether disclosures are conspicuous 
depends heavily on context. The OCC generally expects that disclosures 
that would be considered conspicuous under 12 CFR part 328 would 
generally be considered conspicuous under 12 CFR part 15.
    Control. The OCC proposed to define ``control'' such that a person 
would have controlled another person if: (1) the person directly or 
indirectly or acting through one or more other persons owns, controls, 
or has power to vote 25 percent or more of any class of voting 
securities of the other person; (2) the person controls in any manner 
the election of a majority of the directors or trustees of the other 
person; or (3) the OCC determines, after notice and opportunity for 
hearing, that the person directly or indirectly exercises a controlling 
influence over the management or policies of the other person. Like the 
definition of ``affiliate,'' the proposed definition of ``control'' was 
generally consistent with the Bank Holding Company Act. The OCC noted 
that proposed Sec.  15.14 included certain provisions regarding changes 
in control that would refer to the use of that term under 12 CFR 5.50, 
rather than under the Bank Holding Company Act. Thus, for purposes of 
those provisions, permitted payment stablecoin issuers would refer to 
12 CFR 5.50.
    The OCC received several comments addressing the definition of 
``control.'' Several commenters requested that the OCC clarify the 
definition of control, including by expressly incorporating the 
presumptions of control in the Bank Holding Company Act and the Federal 
Reserve's Regulation Y. Other commenters argued for narrowing the 
definition of control by providing that ``controlling influence'' 
should be assessed based on actual decision-making authority and 
economic control, rather than formal or theoretical influence. One 
commenter advocated for a blend of Bank Holding Company Act and Change 
in Bank Control Act concepts. Some stated that a framework based on the 
Bank Holding Company Act is useful but should be adapted or clarified. 
Some commenters advocated for a narrower definition and for assessing 
controlling influence based on actual economic and legal control, 
rather than theoretical influence. Another stated that control 
encompasses not only ownership and voting power, but also the ability 
to direct or materially influence governance, operational decision-
making, or risk-bearing functions, whether exercised directly or 
indirectly.
    After considering the comments received, the OCC is adopting the 
definition as proposed. This approach aligns with the definition in the 
Bank Holding Company Act, with which market participants are generally 
familiar. Consistent with a statement in the proposal, the OCC 
generally expects that it will interpret questions regarding the 
definition of ``control'' consistent with the provisions of 12 CFR part 
225, including those relating to controlling influences and to the 
presumption of control, as of the date of the issuance of this final 
rule. The interpretations of control under the Bank Holding Company 
Act, including 12 CFR part 225, generally have been developed after 
consideration of the same or similar comments received in response to 
the proposal. Moreover, the OCC may provide additional clarity through 
guidance and interpretations, as necessary. The OCC believes that this 
approach will provide clarity to market participants.
    Customer. The OCC proposed to define the term ``customer'' to mean 
a person that purchases (through any consideration) the products or 
services of another person. Among other provisions, the definition of 
``customer'' was relevant to certain information protection and 
notification requirements.
    The OCC received several comments addressing the definition of 
``customer.'' Several commenters regarded the proposed definition of 
``customer'' as

[[Page 67006]]

overly broad because it could capture indirect relationships between 
stablecoin holders and permitted payment stablecoin issuers. These 
commenters generally argued in favor of requiring a contractual 
relationship between a permitted payment stablecoin issuer and a 
counterparty for the counterparty to be covered by the definition of 
customer. Other commenters generally favored a broad definition that 
would include persons who acquired payment stablecoins in the secondary 
market. One commenter advocated not defining the term.
    The final rule modifies the definition by defining customer (except 
in the context of the custody provisions, where the term ``covered 
customer'' is used) to mean a person that purchases (through any 
consideration) the products or services of a permitted payment 
stablecoin issuer or foreign payment stablecoin issuer directly from 
the issuer or that makes a request directly to the issuer that the 
issuer convert, redeem, or repurchase a payment stablecoin. This 
definition focuses on the relationship between the issuer and its 
direct counterparties. Thus, for example, if a payment stablecoin 
holder acquired its payment stablecoin from a third-party distributor 
(including a distributor that is associated with the payment 
stablecoin, for example, as part of a white-label arrangement) that did 
not act as agent for the permitted payment stablecoin issuer, the 
payment stablecoin holder would not be a customer of the permitted 
payment stablecoin issuer unless and until the holder sought to redeem 
the payment stablecoin from the permitted payment stablecoin issuer (or 
otherwise purchased products or services directly from the permitted 
payment stablecoin issuer).
    The OCC believes that this narrower definition is appropriate in 
light of additional changes, described below, including adopting a 
definition of ``payment stablecoin holder'' and clarifying how certain 
notification requirements in the final rule apply to customers. The OCC 
believes that these changes will help ensure that the term is neither 
overly broad nor overly narrow. The OCC believes that this revised 
definition will result in a set of customers that is easily 
identifiable by permitted payment stablecoin issuers. This definition 
does not affect the definition of customer for purposes of other laws 
and regulations, including privacy laws and the Bank Secrecy Act and 
its implementing regulations.\21\
---------------------------------------------------------------------------

    \21\ See generally 91 FR 37840; Permitted Payment Stablecoin 
Issuer Customer Identification Program, 91 FR 37234 (June 22, 2026).
---------------------------------------------------------------------------

    Deposit. The OCC proposed to define the term ``deposit'' to have 
the same meaning as deposit in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813(l)). The OCC received no comments 
addressing the definition of ``deposit.'' The OCC is adopting the 
definition as proposed.
    Depository institution. The OCC proposed to define the term 
``depository institution'' to mean a depository institution as that 
term is defined in section 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813(c)(1)) or a credit union. The OCC proposed this definition 
because, although the GENIUS Act uses the term ``depository 
institution,'' it is not defined in section 2 of the Act (12 U.S.C. 
5901). Section 11(g) of the Act (12 U.S.C. 5910(g)) does, however, 
refer to the Federal Deposit Insurance Act's definition.\22\ Under the 
Federal Deposit Insurance Act, the term ``depository institution'' 
means any bank or savings association, both of which are defined terms 
under that statute and would be incorporated to determine whether an 
institution is a depository institution for purposes of proposed part 
15. The OCC also proposed to include a reference to credit unions 
consistent with the approach that the GENIUS Act took with respect to 
the definition of ``insured depository institution,'' defined below, 
and which explicitly includes insured credit unions. This term is 
particularly relevant with respect to the OCC's jurisdiction over 
certain nonbank entities under sections 2(25), 4(d), and 7(e) of the 
Act (12 U.S.C. 5901(25), 5903(d), and 5906(e)).
---------------------------------------------------------------------------

    \22\ The proposed definition of ``depository institution'' for 
purposes of part 15 would not affect the meaning of the term under 
section 11(g) of the GENIUS Act (12 U.S.C. 5911).
---------------------------------------------------------------------------

    The OCC received several comments addressing the definition of 
``depository institution.'' Some commenters stated that privately 
insured credit unions should be excluded from the definition so that 
they could apply to be Federal qualified payment stablecoin issuers.
    One commenter suggested that the OCC clarify whether ``depository 
institution'' refers strictly to FDIC-insured institutions or extends 
to other charter types with deposit-like authorities. One commenter 
suggested that the OCC should make clear that the term ``depository 
institution'' also includes the uninsured State branches of foreign 
banks.
    The final rule includes certain modifications to the definition. 
Under the final rule, the term ``depository institution'' would mean a 
depository institution, as that term is defined in section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813(c)(1)), or an insured 
credit union as defined in section 101 of the Federal Credit Union Act 
(12 U.S.C. 1752) (i.e., a credit union that is not an insured credit 
union under section 101 of the Federal Credit Union Act would not be 
included in the definition of depository institution). Absent this 
change, there could have been ambiguity as to which agency is the 
primary Federal payment stablecoin regulator for a non-Federally 
insured credit union. Such a credit union would not meet the definition 
of ``State depository institution'' under section 2(29) of the GENIUS 
Act (12 U.S.C. 5901(29)) but, if the credit union were a depository 
institution, it would not be a nonbank entity. In other words, the 
proposed definition could have the effect of excluding non-Federally 
insured credit unions from being regulated by the OCC as permitted 
payment stablecoin issuers. The amended definition makes clear that a 
non-Federally insured credit union is a nonbank entity and that the OCC 
is the primary Federal payment stablecoin regulator for such entities. 
In response to other comments, the OCC does not believe that it is 
appropriate to limit the definition of ``depository institution'' 
strictly to insured depository institutions. The statute uses both 
terms, and it is appropriate to regard each term as having a separate 
meaning. In light of the GENIUS Act's frequent references to the 
Federal Deposit Insurance Act, the most faithful reading of the statute 
would incorporate the Federal Deposit Insurance Act's definition, with 
the modification described above to address the fact that the GENIUS 
Act addresses credit unions while the Federal Deposit Insurance Act 
does not. Thus, institutions that are depository institutions under the 
Federal Deposit Insurance Act (i.e., national banks, savings 
associations, State banks, Federal branches, and insured branches) 
would be depository institutions for purposes of 12 CFR part 15. The 
OCC further notes that ``insured depository institution'' is defined 
separately (discussed below).
    Digital asset. The OCC proposed to define the term ``digital 
asset'' as provided in section 2(6) of the GENIUS Act (12 U.S.C. 
5901(6)). Under the proposed rule, the term ``digital asset'' would 
have meant any digital representation of value that is recorded

[[Page 67007]]

on a cryptographically secured distributed ledger.
    The OCC received several comments addressing the definition of 
``digital asset.'' Several commenters supported the proposed definition 
but asked the OCC to clarify that application of this definition within 
the proposed rule remains limited to the activities and obligations 
expressly contemplated by the GENIUS Act. Some commenters suggested 
that the OCC ensure that the definition clearly distinguishes between 
(i) payment stablecoins covered by the rule, (ii) tokenized deposits 
and certain other bank liabilities, and (iii) digital representations 
of traditional financial assets that do not function as standalone 
mediums of exchange. One commenter stated that the definition does not 
cover non-fungible loyalty points, to the extent they are not recorded 
on a cryptographically secured distributed ledger.
    The OCC is adopting the definition as proposed. The regulatory 
definition matches the statutory definition. In response to comments, 
other definitions, including the definition of ``payment stablecoin,'' 
appropriately distinguish different types of digital assets from one 
another. The definition of ``payment stablecoin'' distinguishes a 
payment stablecoin from a deposit, including a tokenized deposit, 
without any need to revise the broader definition of ``digital asset.'' 
In addition, the OCC confirms that the definition applies for purposes 
of implementing the GENIUS Act under part 15 and does not necessarily 
apply in other contexts. The OCC also confirms that, under the 
definition in part 15, a representation of value that is not recorded 
on a cryptographically secured distributed ledger is not a digital 
asset.
    Digital asset service provider. The proposed rule did not include 
the term ``digital asset service provider'' but sought comment on 
whether to include such a term. The OCC received several comments on 
the term. Many of these comments sought clarifications around the scope 
of the term. Some sought to distinguish digital asset service providers 
from permitted payment stablecoin issuers. Others requested that the 
OCC clarify that the term does not include providers of blockchain 
infrastructure or DeFi activities. Others stated that the statutory 
definition was sufficiently clear or that the OCC had no authority to 
interpret the term.
    The final rule, like the proposal, does not use the term, which is 
generally more relevant to section 3 of the GENIUS Act (12 U.S.C. 5902) 
than the sections that part 15 implements. The OCC therefore found it 
unnecessary to define the term for purposes of part 15. The OCC does 
note that certain provisions of the GENIUS Act (e.g., 12 U.S.C. 5902) 
apply to digital asset service providers and that permitted payment 
stablecoin issuers may also be considered digital asset service 
providers. Accordingly, permitted payment stablecoin issuers should 
ensure compliance both with the rules that apply to permitted payment 
stablecoin issuers and the rules that apply to digital asset service 
providers, as applicable.\23\
---------------------------------------------------------------------------

    \23\ See Department of the Treasury, GENIUS Act Regulations on 
Payment Stablecoin Issuance, Offer, and Sale, 91 FR 53368, 53371 
(August 18, 2026) (stating that permitted payment stablecoin issuers 
are also digital asset service providers under the GENIUS Act).
---------------------------------------------------------------------------

    Director. The OCC proposed to define the term ``director'' for 
purposes of proposed part 15 to mean an individual who serves on the 
board of directors of a permitted payment stablecoin issuer or 
applicant, except an advisory director who does not have the authority 
to vote on matters before the board of directors or any committee of 
the board of directors and provides solely general policy advice to the 
board of directors or any committee. The OCC based the proposed 
definition on the definition included in 12 CFR 5.51. The proposed 
definition was modified from that in 12 CFR 5.51 to remove the 
exclusion for a director of a foreign bank that operates a Federal 
branch. The OCC determined that this language was unnecessary in light 
of the proposed definition of the term ``board of directors.'' As 
described above, to address the various organizational forms used by 
permitted payment stablecoin issuers and applicants, including those 
that do not have a traditional board of directors, the OCC proposed to 
define the term ``board of directors'' in proposed part 15 to include a 
group of individuals that serve the nearest equivalent function of 
acting as the governing body of the issuer or applicant. For a Federal 
branch, individuals who would meet the proposed definition of 
``director'' would include individuals that are part of that group. 
Further, a director of a foreign bank is not a director of the branch 
unless the director serves on the board of a Federal branch (or serves 
in an equivalent capacity with respect to the branch).
    The OCC received a few comments addressing the definition of 
``director.'' A commenter suggested that: (i) branch-level senior 
officers should not automatically be considered ``directors'' solely 
because they exercise local management authority and (ii) for Federal 
branches seeking to issue stablecoins through a subsidiary, 
``director'' should mean members of the subsidiary's board with binding 
governance authority, not the branch's country officer or regional 
manager.\24\ The OCC is adopting the definition as proposed. The OCC 
believes the proposed definition was appropriately scoped in light of 
the definition of ``board of directors,'' which includes the group of 
individuals that serves the nearest equivalent function of acting as 
the governing body of the issuer or applicant. This definition focuses 
on persons with actual authority with respect to an entity. This 
functional definition of ``director'' appropriately captures persons 
serving the actual governance function associated with serving on the 
board of directors, regardless of formal structure or title.
---------------------------------------------------------------------------

    \24\ The commenter also stated that independent directors 
required for audit and risk committees should not need to be United 
States citizens but must be subject to United States jurisdiction 
for enforcement purposes. The OCC confirms that a director need not 
be a United States citizen but is subject to the enforcement 
provisions of the GENIUS Act.
---------------------------------------------------------------------------

    Distributed ledger. The OCC proposed to define the term 
``distributed ledger'' as provided in the GENIUS Act, 12 U.S.C. 
5901(8), with certain technical edits. The proposed rule defined the 
term ``distributed ledger'' to mean technology in which (1) data is 
shared across a network that creates a public digital ledger of 
verified transactions or information among network participants and (2) 
cryptography is used to link the data to maintain the integrity of the 
public ledger and execute other functions. The proposed definition 
reformatted the definition in the GENIUS Act by using numbering to 
distinguish between the two components of the definition. The 
formatting changes were technical and did not substantively affect the 
definition.
    The OCC received several comments addressing the definition of 
``distributed ledger.'' Commenters generally supported the proposed 
definition but suggested making clarifications or including definitions 
of additional terms. For example, commenters had varying views on 
whether the term should include or exclude public ledgers, private 
ledgers, or semi-private ledgers.
    The OCC is adopting the definition as proposed. This approach 
aligns with the statute. The OCC may address future innovations and 
developments through interpretations or additional rulemaking, as 
appropriate.
    Distributed ledger protocol. The OCC proposed to define the term 
``distributed

[[Page 67008]]

ledger protocol'' as provided in the GENIUS Act, 12 U.S.C. 5901(9). The 
term ``distributed ledger protocol'' would have meant publicly 
available and accessible executable software deployed to a distributed 
ledger, including smart contracts or networks of smart contracts. The 
OCC received no comments separately addressing the definition of 
``distributed ledger protocol.'' The final rule, however, does not use 
the term. Accordingly, the OCC is not including a definition of the 
term in the final rule.
    Eligible financial institution. The OCC proposed to define 
``eligible financial institution'' to mean (1) a person that (a) is 
eligible to hold reserve assets in custody under section 10(a) of the 
GENIUS Act (12 U.S.C. 5909(a)); (b) complies with the applicable 
requirements in section 10(b), (c), and (d) of the GENIUS Act (12 
U.S.C. 5909(b), (c) and (d)), including with applicable implementing 
regulations issued by a relevant primary Federal payment stablecoin 
regulator as defined in 12 U.S.C. 5901(25), primary financial 
regulatory agency described in 12 U.S.C. 5301(12)(B) or (C), State bank 
supervisor, or State credit union supervisor; and (c), if applicable, 
enters into a custody agreement with a permitted payment stablecoin 
issuer documenting the person's compliance with paragraph (2) of the 
definition of eligible financial institution; or (2) a Federal Reserve 
Bank.
    The term ``eligible financial institution'' is relevant to the 
reserve asset diversification and concentration requirements in Sec.  
15.11(c) of the rule. Under section 10(a) of the GENIUS Act (12 U.S.C. 
5909(a)), a person may only engage in the business of providing 
custodial or safekeeping services for the payment stablecoin reserve, 
the payment stablecoins used as collateral, or the private keys used to 
issue payment stablecoins if the person meets certain requirements, 
including being subject to supervision or regulation by a primary 
Federal payment stablecoin regulator, primary financial regulatory 
agency, or supervision by a State bank supervisor or a State credit 
union supervisor if such State bank supervisor or State credit union 
supervisor makes available to the Federal Reserve certain information. 
Such a person must also comply with the requirements under section 
10(b) of the GENIUS Act (12 U.S.C. 5909(b)), unless the person holds 
such property in accordance with similar requirements as required by a 
primary Federal payment stablecoin regulator, the Securities and 
Exchange Commission, or the Commodity Futures Trading Commission.
    Eligible financial institutions would have included insured 
depository institutions and national banks regardless of whether the 
entities engaged in stablecoin activities or provided custody services 
to permitted payment stablecoin issuers because these entities are 
subject to supervision or regulation by a primary Federal payment 
stablecoin regulator. Thus, for example, under proposed Sec.  15.11(c) 
a permitted payment stablecoin issuer could hold reserves as deposits 
at a national bank regardless of whether the national bank acted as 
custodian for the permitted payment stablecoin issuer's other reserve 
assets.
    To meet the proposed definition, a financial institution would have 
also needed to comply with the applicable requirements of section 10 of 
the Act (12 U.S.C. 5909), and the relevant custody agreement would have 
needed to reflect compliance with section 10 as well as policies and 
procedures to ensure such compliance.\25\ These criteria help ensure 
compliance with section 10 of the Act.
---------------------------------------------------------------------------

    \25\ As discussed above, to the extent that an eligible 
financial institution does not engage in custody of covered assets, 
section 10 of the GENIUS Act (12 U.S.C. 5909) would not apply.
---------------------------------------------------------------------------

    The OCC recognized that multiple agencies will regulate permitted 
payment stablecoin issuers and the entities that may permissibly 
custody reserve assets. The proposed rule would have imposed 
requirements on where and how OCC-regulated permitted payment 
stablecoin issuers may hold reserve assets in Sec.  15.11. Proposed 
subpart C would have separately imposed the requirements of section 10 
of the GENIUS Act (12 U.S.C. 5909) on OCC-regulated institutions that 
hold reserve assets on behalf of payment stablecoin issuers, including 
on behalf of payment stablecoin issuers not regulated by the OCC. 
Proposed Sec.  15.11 did not mandate that OCC-regulated permitted 
payment stablecoin issuers only hold their reserve assets in the 
custody of OCC-regulated custodians. Accordingly, the proposal 
acknowledged that there could be overlap between the requirements 
imposed by different regulators with different requirements 
implementing section 10 of the GENIUS Act. The OCC invited comment on 
the best ways to manage potentially overlapping requirements. The 
proposed rule would have required that an ``eligible financial 
institution'' comply with the requirements in section 10(b), (c), and 
(d) of the GENIUS Act, including applicable implementing regulations. 
Accordingly, even if different types of eligible financial institutions 
were subject to different regulations on the safe handling of 
stablecoin reserve assets, an OCC-regulated permitted payment 
stablecoin issuer could still custody reserve assets at any entity that 
met the requirements in the definition of ``eligible financial 
institution.''
    The proposed rule would have required a permitted payment 
stablecoin issuer to enter into a custody agreement with an eligible 
financial institution, which would have required that the eligible 
financial institution adhere to the requirements in section 10(b), (c), 
and (d), along with any applicable implementing regulations. This 
requirement would have helped ensure that the eligible financial 
institution knows that it is subject to the requirements of the GENIUS 
Act and would have provided permitted payment stablecoin issuers a 
contractual means of enforcing compliance with applicable provisions of 
the Act.
    The OCC received several comments addressing the definition of 
``eligible financial institution.'' Commenters generally supported the 
proposed definition but made suggestions that the OCC make certain 
clarifications. One commenter suggested publishing and maintaining a 
list of institution types that qualify as eligible financial 
institutions, rather than leaving payment stablecoin holders to 
determine what may be an eligible financial institution. The OCC will 
not provide a list of eligible financial institutions or eligible 
financial institution types as that list may become stale as new types 
of entities become eligible to hold reserve assets in custody under 
section 10 of the Act (12 U.S.C. 5909) and it would be resource-
intensive for the OCC to identify all eligible financial institutions 
regulated by different States. Rather than updating the list every time 
a new entity type becomes eligible, the OCC believes that a definition 
that relates back to the statutory requirements in section 10 (12 
U.S.C. 5909) is appropriate.
    One commenter suggested that the OCC confirm the eligibility of 
foreign branches and agencies as eligible financial institutions for 
reserve custody purposes. The OCC confirms that foreign branches and 
agencies may hold reserve assets in custody, provided that they meet 
the requirements in section 10 of the GENIUS Act (12 U.S.C. 5909). 
However, as discussed below, deposit liabilities of institutions that 
are not insured depository institutions do not qualify as reserve 
assets under section

[[Page 67009]]

4(a)(1)(A)(ii) of the GENIUS Act (12 U.S.C. 5903(a)(1)(A)(ii)).\26\
---------------------------------------------------------------------------

    \26\ Uninsured deposits of insured banks are, however, 
permissible reserve assets under section 4(a)(1)(ii) of the GENIUS 
Act (12 U.S.C. 5903(a)(1)(ii)).
---------------------------------------------------------------------------

    To be clear, section 10 of the Act (12 U.S.C. 5909) would not apply 
to a foreign custodian holding payment stablecoin reserves where there 
is no nexus to the United States. This approach ensures that the Act 
does not have an overly broad extraterritorial effect. However, holding 
payment stablecoin reserves for a permitted payment stablecoin issuer 
is clearly within the scope of section 10 of the Act (12 U.S.C. 5909). 
Moreover, because the definition of permitted payment stablecoin issuer 
is limited to persons formed in the United States, holding reserve 
assets for such persons entails a clear nexus to the United States.
    A few commenters stated that eligibility should be based more on 
the activities performed and the institution's ability to satisfy 
segregation, custody, and operational standards than on balance sheet 
size or charter type, so that institutions of varying sizes and charter 
types can participate if they meet the relevant standards. The OCC's 
proposed definition would not have been inconsistent with these 
comments. The proposed definition did not impose any limitations for 
eligible financial institutions based on size. Moreover, the proposed 
rule did not limit eligible financial institutions to any particular 
charter type. Rather, the proposed rule imported the requirement in 
section 10 of the Act (12 U.S.C. 5909) that the institution be subject 
to supervision by certain State or Federal regulators.
    Another commenter suggested that the OCC align the definition with 
established statutory and regulatory frameworks, such as the Bank 
Holding Company Act and State money transmitter laws, to promote 
consistency and reduce ambiguity. The OCC does not believe that further 
alignment is necessary or appropriate. Section 10 of the Act (12 U.S.C. 
5909) sets forth the supervisory framework that applies to custodians 
of reserve assets, and the proposed rule merely ensures that such 
custodians comply with section 10. Any further changes to the 
definition could result in narrowing or broadening the types of 
institutions that may hold reserve assets in custody in a manner 
inconsistent with the statute.
    One commenter stated that the definition of ``eligible financial 
institution'' should not be conditioned on complying with sections 
10(b), (c), and (d) of the GENIUS Act (12 U.S.C. 5909(b)-(d)). The OCC 
disagrees. Sections 10(b), (c), and (d) each cross-reference to persons 
described in section 10(a) of the Act (12 U.S.C. 5909(a)). Thus, a 
person that is eligible to hold payment stablecoin reserve assets in 
custody under section 10(a) (12 U.S.C. 5909(a)) is subject to the 
requirements of sections 10(b), (c), and (d) of the Act, as 
applicable.\27\
---------------------------------------------------------------------------

    \27\ Under section 10(a)(2) of the Act, 12 U.S.C. 5909(a)(2), a 
custodian of reserve assets must comply with the requirements of 
section 10(b) of the Act unless the custodian holds the reserve 
assets (or other covered assets) in accordance with similar 
requirements as required by a primary Federal payment stablecoin 
regulator, the Securities and Exchange Commission, or the Commodity 
Futures Trading Commission.
---------------------------------------------------------------------------

    The OCC is adopting the definition, with technical changes. The 
final rule renumbers paragraphs (1)(a) through (c) as (1)(i) through 
(iii) and replaces in paragraph (iii) a reference to paragraph (2) with 
a reference to paragraph (1)(ii). The final rule also includes 
additional clarifying language stating that a person must have in place 
policies and procedures designed to ensure compliance with paragraph 
(ii) (whereas the proposal referred to policies and procedures without 
explicit language clarifying that the person must have such policies 
and procedures in place). The definition appropriately encompasses the 
institutions that may hold reserve assets under section 10 of the 
GENIUS Act (12 U.S.C. 5909).
    Excessive. The OCC received a few comments recommending the OCC 
define ``excessive'' both for purposes of affiliate transactions and 
for purposes of relevant capital requirements. The OCC is not adding a 
definition of ``excessive'' because the final rule does not use the 
term. The OCC has revised the provisions of the rule that used the word 
``excessive'' in the proposal to provide additional clarity.
    Executive officer. The OCC proposed a definition for the term 
``executive officer,'' which is used in connection with the proposed 
application process in Sec.  15.30. Under the proposal, the term 
``executive officer'' would have been defined to mean the president, 
chairman, chief executive officer, chief operating officer, chief 
financial officer, chief investment officer, chief risk officer, chief 
technology officer, and Bank Secrecy Act officer. The term would have 
included any individual serving in the functional capacity of the 
listed titles or their equivalent, without regard to title, salary, or 
compensation. The OCC based the proposed ``executive officer'' 
definition on the definition of ``Senior executive officer'' in 12 CFR 
5.51(c)(4) with certain modifications to conform the language and 
format to apply to the relevant individuals and entities under this 
part and to streamline the definition to the positions most likely to 
be relevant for permitted payment stablecoin issuers. The OCC received 
no comments addressing the definition of ``executive officer.'' The OCC 
is adopting the definition as proposed.
    Fair value. The OCC proposed to include a definition of the term 
``fair value'' in the rule. As proposed, the term ``fair value'' would 
mean the fair value as determined under GAAP.\28\ Fair value is used in 
the definition of ``reserve asset value,'' which pertains to the 
reserve asset requirements in Sec.  15.11. The OCC received no comments 
addressing the definition of ``fair value.'' The OCC is adopting the 
definition as proposed.
---------------------------------------------------------------------------

    \28\ See discussion of the definition of ``GAAP,'' infra.
---------------------------------------------------------------------------

    FDIC. The OCC proposed to define FDIC to mean the Federal Deposit 
Insurance Corporation. This accords with the definition of 
``Corporation'' in section 2(5) of the GENIUS Act (12 U.S.C. 5901(5)). 
The OCC opted not to use the term ``Corporation'' to describe the FDIC 
because that term is used more broadly in the definition of person, 
discussed below. The OCC received no comments addressing the definition 
of ``FDIC.'' The OCC is adopting the definition as proposed.
    Federal branch. The OCC proposed to define the term ``Federal 
branch'' as provided in the GENIUS Act, 12 U.S.C. 5901(10). 
Specifically, the proposed rule provided that the term ``Federal 
branch'' would have the meaning set forth in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(s)(2)). The OCC received no 
comments addressing the definition of ``Federal branch.'' The OCC is 
adopting the definition as proposed.
    Federal qualified payment stablecoin issuer. The OCC proposed to 
define the term ``Federal qualified payment stablecoin issuer'' 
consistent with the definition of that term in the GENIUS Act, 12 
U.S.C. 5901(11), with certain technical and conforming changes. 
Specifically, the proposed rule defined the term ``Federal qualified 
payment stablecoin issuer'' to mean the following entities that are 
approved by the OCC, pursuant to proposed Sec.  15.30, to issue payment 
stablecoins: (1) a nonbank entity, other than a State qualified payment 
stablecoin issuer; (2) an uninsured national bank that is chartered by 
the OCC, pursuant to title LXII of the Revised Statutes; or (3) a

[[Page 67010]]

Federal branch.\29\ The proposed definition modified the definition 
provided in the GENIUS Act by reformatting it to reduce repetition and 
replacing the statutory term ``Comptroller'' with the proposed defined 
term ``OCC.'' In addition, the proposed definition replaced cross 
references to section 5 of the GENIUS Act (12 U.S.C. 5904) with a cross 
reference to the proposed implementing provisions in proposed Sec.  
15.30. The OCC received no comments addressing the definition of 
``Federal qualified payment stablecoin issuer.'' The OCC is adopting 
the definition as proposed.
---------------------------------------------------------------------------

    \29\ Certain Federal qualified payment stablecoin issuers may be 
subsidiaries of national banks. For example, an uninsured national 
trust bank may be a subsidiary of a national bank. An insured 
national bank or Federal savings association seeking to issue a 
payment stablecoin would, however, need to do so through a 
subsidiary, as required under the GENIUS Act. See 12 U.S.C. 5901(23) 
(defining ``permitted payment stablecoin issuer'').
---------------------------------------------------------------------------

    Federal Reserve. The proposed rule defined the term ``Federal 
Reserve'' to mean the Board of Governors of the Federal Reserve System. 
This accords with the definition of ``Board'' in section 2(3) of the 
GENIUS Act (12 U.S.C. 5901(3)). The OCC proposed to use the term 
``Federal Reserve'' in place of ``Board'' for greater clarity because 
the proposed rule refers separately to boards of directors in various 
sections. The OCC received no comments addressing the definition of 
``Federal Reserve.'' The OCC is adopting the definition as proposed.
    Foreign payment stablecoin issuer. The OCC proposed to define the 
term ``foreign payment stablecoin issuer'' consistent with the 
definition of that term in the GENIUS Act, 12 U.S.C. 5901(12), with 
certain clarifying changes. Under the proposed rule, the term ``foreign 
payment stablecoin issuer'' would have meant an issuer of a payment 
stablecoin that is (1) organized under the laws of or domiciled in a 
foreign country or a territory of the United States; and (2) not a 
permitted payment stablecoin issuer as defined in 12 U.S.C. 5901(23). 
The proposed definition of foreign payment stablecoin issuer referred 
to the statutory definition of ``permitted payment stablecoin issuer'' 
because the proposed rule generally limits the definition of that term 
to entities subject to the OCC's jurisdiction.
    Although included in the statutory definition, the proposed 
definition did not include the phrase ``Puerto Rico, Guam, American 
Samoa, or the Virgin Islands.'' The OCC determined that the omitted 
phrase was redundant and may lead to confusion. Under the proposed 
definition, a foreign payment stablecoin issuer may be organized under 
the laws of, or domiciled in, any territory of the United States. The 
United States currently has five permanently inhabited territories: the 
four listed above and the Northern Mariana Islands. The OCC received no 
comments addressing the definition of ``foreign payment stablecoin 
issuer.'' The OCC is adopting the definition as proposed with a 
technical modification to add commas.
    Freeze and seize. The OCC received one comment stating that the OCC 
should separately define ``freeze'' and ``seize.'' The final rule does 
not use these terms. Therefore, the OCC has elected not to define them. 
To the extent they are used in the forthcoming rule considering BSA/AML 
and sanctions, the OCC may consider defining these terms.
    GAAP. The OCC proposed to include a definition of the term GAAP in 
the rule. The proposed rule defined the term ``GAAP'' to mean generally 
accepted accounting principles as used in the United States. GAAP is 
used in the definition of fair value and proposed subparts B and E. The 
OCC received no comments addressing the definition of ``GAAP.'' The OCC 
is adopting the definition as proposed.
    Immediate family. The OCC proposed to define the term ``immediate 
family'' to mean the spouse of an individual, the individual's minor 
children, and any of the individual's children (including adults) 
residing in the individual's home. This term is relevant to the risk 
management standards concerning insider and affiliate transactions and 
is consistent with the definition in Regulation O (12 CFR part 215). 
The OCC received no comments addressing the definition of ``immediate 
family.'' The OCC is adopting the definition as proposed.
    Insider. The OCC proposed to define the term ``insider'' to mean a 
principal shareholder, an executive officer, a director, or a related 
interest of, or the immediate family member of, any of these persons. 
This term is relevant to the risk management standards concerning 
insider and affiliate transactions and is adapted from the definition 
in Regulation O (12 CFR part 215). The term was adapted to make direct 
reference to the immediate family of a principal shareholder, executive 
officer, or director to mitigate the risk of an insider engaging in 
inappropriate transactions to benefit immediate family members. The OCC 
received no comments addressing the definition of ``insider.'' The OCC 
is adopting the definition as proposed with a technical modification to 
add commas.
    Insured credit union. The OCC proposed to define the term ``insured 
credit union'' consistent with the definition of the term in the GENIUS 
Act, 12 U.S.C. 5901(14). As proposed, the term ``insured credit union'' 
would have the meaning given to that term in section 101 of the Federal 
Credit Union Act (12 U.S.C. 1752). The OCC received no comments 
addressing the definition of ``insured credit union.'' The OCC is 
adopting the definition as proposed.
    Insured depository institution. The OCC proposed to define the term 
``insured depository institution'' consistent with the definition of 
the term in the GENIUS Act, 12 U.S.C. 5901(15). As proposed, the term 
``insured depository institution'' would have been defined to mean an 
insured depository institution, as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(c)(2)) and an insured credit 
union.
    The OCC received a number of comments addressing the definition of 
``insured depository institution.'' Some commenters stated that the OCC 
should define ``insured depository institution'' by reference to 
section 3(c)(3) of the Federal Deposit Insurance Act rather than the 
generally applicable definition in section 3(c)(2) of the same Act. 
Commenters stated that excluding uninsured branches from the definition 
distorts markets and contradicts the GENIUS Act's intent to decouple 
payment stablecoins from deposit insurance and to promote competitive 
equity among United States banks and foreign banks and would be 
inconsistent with generally applicable principles of national 
treatment. Commenters also stated that using the broader definition in 
section 3(c)(3) of the Federal Deposit Insurance Act would be 
consistent with longstanding principles concerning national treatment. 
Commenters stated that the term ``insured depository institution'' 
should not depend on actual FDIC insurance coverage (per section 
3(c)(2) of the Federal Deposit Insurance Act) but rather on 
comprehensive regulation and enforcement (per section 3(c)(3) of the 
Federal Deposit Insurance Act). A few commenters stated that 
legislative history supports treating foreign banking organizations the 
same as United States banks and indicates that reserve demand deposits 
need not be insured so long as they are held at regulated institutions. 
Some commenters pointed to prior Federal Reserve interpretations under 
section 716 of the Dodd-Frank Act as support for reading ambiguous 
statutory

[[Page 67011]]

language to include branches and agencies of foreign banks. One 
commenter also stated that, while reserve balances generally should be 
held onshore to support onshore redemption, issuers should be able to 
hold a portion of reserves offshore to facilitate minting and burning 
for non-U.S. holders outside United States banking hours. Another 
commenter argued that using the broader definition would be consistent 
with the goals of the statute and would not create undue risk given the 
applicable prudential regulations.
    The OCC is adopting the definition as proposed. Under section 
3(c)(2) of the Federal Deposit Insurance Act, ``insured depository 
institution'' means any bank or savings association the deposits of 
which are insured by the FDIC. This is the definition that generally 
applies under the Federal Deposit Insurance Act. Section 3(c)(3) 
provides that the term ``insured depository institution'' also includes 
any uninsured branch or agency of a foreign bank or a commercial 
lending company owned or controlled by a foreign bank for purposes of 
12 U.S.C. 1818. As this provision is clearly limited to section 8 of 
the Federal Deposit Insurance Act, it would not be a permissible 
interpretation of the Act to extend the provision beyond section 8 of 
the Federal Deposit Insurance Act. Therefore, uninsured branches and 
agencies of foreign banks or commercial lending companies owned or 
controlled by foreign banks are not insured depository institutions 
under the Act based on a plain reading of the Act. Because the statute 
is clear that uninsured branches and agencies of foreign banks are not 
insured depository institutions, the OCC is not amending the 
definition.
    Monetary value. The OCC proposed to define the term ``monetary 
value'' as provided in the GENIUS Act, 12 U.S.C. 5901(17). The proposal 
defined ``monetary value'' to mean a national currency or deposit 
(which, as discussed above, would have the same meaning as in section 3 
of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)) denominated in 
a national currency. The OCC received no comments addressing the 
definition of ``monetary value.'' The OCC is adopting the definition as 
proposed.
    Money. Section 2(18) of the GENIUS Act, 12 U.S.C. 5901(18), defines 
``money'' to mean a medium of exchange currently authorized or adopted 
by a domestic or foreign government, including a monetary unit of 
account established by an intergovernmental organization or by 
agreement between two or more countries. This definition is relevant to 
the definition of national currency (discussed below) and certain 
reserve assets described in section 4(a)(1)(A)(i) and (iv) of the Act 
(12 U.S.C. 5903(a)(1)(A)(i) and (iv)). Section 4(a)(1)(A)(i) refers to 
money standing to the credit of an account with a Federal Reserve Bank. 
Section 4(a)(1)(A)(iv) refers to money received under a repurchase 
agreement that meets certain requirements. Although the statutory 
definition of money clearly includes monetary value, it may be unclear 
at any point in time whether other mediums of exchange have been 
authorized or adopted by a domestic or foreign government. Moreover, 
whether a medium of exchange meets this definition may change based on 
actions of foreign governments or intergovernmental organizations. 
While it may be relatively clear whether an asset is money standing to 
the credit of an account with a Federal Reserve Bank, there could be 
ambiguity as to whether a particular asset is money received under a 
repurchase agreement. Therefore, to promote clarity and uniformity for 
purposes of determining whether certain assets would qualify as money, 
the OCC proposed that it would provide prior confirmation publicly that 
a medium of exchange (other than those defined as monetary value) meets 
the definition of ``money'' under the GENIUS Act. Specifically, the OCC 
proposed to define ``money'' for the purposes of part 15 to mean 
monetary value and any other medium of exchange that the OCC has 
determined is currently authorized or adopted by a domestic or foreign 
government, including a monetary unit of account established by an 
intergovernmental organization or by agreement between two or more 
countries.
    The OCC received a few comments addressing the definition of 
``money.'' Commenters generally supported the proposed definition but 
suggested that the OCC incorporate certain additions. One commenter 
suggested that the OCC confirm that ``money'' does not include 
particular crypto-assets. Another commenter suggested that the OCC 
should not rely solely on the statutory language and should clarify 
that determinations issued are binding on all primary Federal payment 
stablecoin regulators to prevent interagency inconsistency. Another 
commenter suggested that the OCC should explicitly state that any OCC 
determination must remain grounded in whether the instrument functions 
as a government-authorized medium of exchange, consistent with the 
GENIUS Act's structure and purpose.
    The OCC is adopting the definition as proposed. The OCC believes 
that this definition will provide sufficient clarity as to what 
constitutes money and will allow the OCC to assess the facts presented 
by any particular medium of exchange. The OCC declines to confirm in 
regulation text whether any particular asset that is not monetary value 
is money because such regulation text may become dated quickly as 
governments may authorize or deauthorize such assets. To promote 
clarity and consistency, the OCC intends to publish any determinations 
it makes as to whether an asset constitutes ``money'' for purposes of 
part 15.
    National currency. The OCC proposed to define the term ``national 
currency'' as provided in the GENIUS Act, 12 U.S.C. 5901(19). Under the 
proposed rule, the term ``national currency'' would have meant (1) a 
Federal Reserve note (as the term is used in the first undesignated 
paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 411)); 
(2) money standing to the credit of an account with a Federal Reserve 
Bank; (3) money issued by a foreign central bank; or (4) money issued 
by an intergovernmental organization pursuant to an agreement by two or 
more governments. The OCC received no comments addressing the 
definition of ``national currency.'' The OCC is adopting the definition 
as proposed.
    Nonbank entity. The OCC proposed to define the term ``nonbank 
entity'' as provided in the GENIUS Act, 12 U.S.C. 5901(20). 
Specifically, under the proposed rule, the term ``nonbank entity'' 
would have meant a person that is not a depository institution or 
subsidiary of a depository institution. Consistent with the statutory 
definition, a nonbank entity could include a non-subsidiary affiliate 
of a depository institution.
    One commenter requested that the OCC confirm that the definition of 
nonbank entity can include certain FinCEN-registered money services 
businesses. The OCC confirms that any person that is not a depository 
institution or a subsidiary of a depository institution is a nonbank 
entity. Thus, money services businesses that are not depository 
institutions (or subsidiaries of depository institutions) are nonbank 
entities and may apply to become Federal qualified payment stablecoin 
issuers. In addition, as described above, under the final rule, an 
uninsured credit union would constitute a nonbank entity due to 
revisions to the definition of depository

[[Page 67012]]

institution. The OCC is adopting the definition as proposed.
    Nonpublic personal information. The OCC proposed to define the term 
``nonpublic personal information'' to mean information (1) provided by 
a customer to a permitted payment stablecoin issuer to obtain a 
financial product or service, (2) about a customer resulting from any 
transaction involving a financial product or service between the 
permitted payment stablecoin issuer and a customer, or (3) otherwise 
obtained by the permitted payment stablecoin issuer in connection with 
providing a financial product or service to a customer. The proposed 
definition did not include publicly available information, unless such 
publicly available information, when combined with other information, 
would reveal the identity of a customer or would enable access to the 
customer's account.
    The OCC received several comments addressing the definition of 
nonpublic personal information. Commenters generally argued that the 
proposed definition is overbroad and should better distinguish between 
nonpublic customer information and information associated with public 
blockchain activity or institutional transactions. Some commenters 
suggested that the OCC should limit the definition to information that 
is not publicly available and that an issuer receives in confidence 
through a direct customer relationship. Several commenters suggested 
that the OCC clarify that information recorded on a public blockchain 
is not nonpublic personal information for purposes of the rule. One 
commenter suggested that Travel Rule data transmitted as part of 
interbank settlement merits special treatment and should be dealt with 
under BSA/AML confidentiality frameworks rather than consumer privacy 
frameworks.
    The OCC is adopting the proposed definition, with certain 
modifications to the proposed exclusion for publicly available 
information. Under the final rule, nonpublic personal information does 
not include publicly available information, including information 
broadly accessible through a distributed ledger. The final rule 
eliminates language concerning the use of publicly available 
information that, when combined with other information, would reveal 
the identity of a customer or would enable access to the customer's 
account. The OCC determined that this language was unnecessary because 
the reference to ``other information'' concerned nonpublic information. 
Under the final rule, for example, public wallet addresses would not be 
considered nonpublic information, but certain additional private 
information that could tie a customer's identity to the address would 
be considered nonpublic information. Nonpublic information would also 
generally include sensitive customer information, described in greater 
detail below. The OCC believes that the revisions to the definitions of 
nonpublic personal information and customer combined with revisions to 
the final rule's risk management requirements will provide greater 
clarity for permitted payment stablecoin issuers while ensuring that 
customer information is appropriately protected. With respect to the 
comment concerning Travel Rule data, the comment is outside the scope 
of this final rule. The OCC is clarifying that the provisions of 12 CFR 
part 15 relating to nonpublic personal information do not alter any 
obligations under BSA/AML frameworks.
    OCC. The OCC proposed to substitute the term ``OCC'' for the term 
``Comptroller'' as defined in the GENIUS Act, 12 U.S.C. 5901(4). 
Specifically, the proposed rule defined the term ``OCC'' to mean the 
Office of the Comptroller of the Currency. The proposed definition 
would refer to the organization as opposed to the individual who 
occupies the office. Using the term OCC is consistent with the agency's 
terminology in other regulations for which it has rulemaking authority. 
The OCC received no comments addressing the definition of ``OCC.'' The 
OCC is adopting the definition as proposed.
    Outstanding issuance value. The OCC proposed to define the term 
``outstanding issuance value'' to mean the total consolidated par value 
of all of a payment stablecoin issuer's payment stablecoins. This would 
have included the combined total par value of different brands of 
payment stablecoin issued by the payment stablecoin issuer (e.g., under 
a white-label arrangement) to the extent that such an arrangement 
complies with proposed 12 CFR part 15. The OCC sought comment on the 
proposed definition, including whether it should include the par value 
of the issuance of non-consolidated affiliates. The OCC received 
several comments addressing the definition of ``outstanding issuance 
value.'' Commenters generally suggested that the OCC adopt a definition 
that is clear, operationally workable, and aligned with reserve backing 
and accurate measurement of circulating supply. Commenters urged the 
OCC to clarify the scope of ``outstanding issuance value.'' Commenters 
also asked the OCC to clarify the treatment of repurchased but not yet 
permanently retired tokens, temporary discrepancies caused by technical 
or legal compliance processes, and the application of the definition in 
multi-issuer or branded stablecoin arrangements.
    The OCC is adopting the definition with certain clarifications. 
Under the final rule, ``outstanding issuance value'' means the total 
par value of all the payment stablecoins issued by a permitted payment 
stablecoin issuer. The final rule's definition is consistent with the 
statute's focus on the issuer, rather than the issuer's affiliates. 
Absent conduct suggesting an attempt to evade the GENIUS Act or an 
arrangement that suggests that reserve assets may be inadequate or 
misallocated relative to outstanding issuance value, the OCC does not 
believe that it is generally necessary to include payment stablecoins 
issued by affiliates that are not consolidated into a permitted payment 
stablecoin issuer in the outstanding issuance value of the permitted 
payment stablecoin issuer.\30\ Not including non-consolidated 
affiliates will also help ensure that business models that rely on 
multiple SPV issuers are not penalized relative to other business 
models. Such SPV issuers would only need to hold reserve assets against 
the payment stablecoins that they issue, rather than also needing to 
hold reserves against an affiliate's payment stablecoins. In response 
to commenters, the OCC reiterates that, to be included within 
outstanding issuance value, an instrument must be a payment stablecoin, 
which means that the issuer must have incurred the obligation to 
convert, redeem, or repurchase the payment stablecoin. Thus, for 
purposes of calculating the outstanding issuance value, a digital asset 
that is, or is designed to be, used as a means of payment or settlement 
but for which there is not yet an obligation to convert, redeem, or 
repurchase for a fixed amount of monetary value would not be included 
in the calculation. A digital asset minted (i.e., created on a 
blockchain) by an issuer to be a payment stablecoin would not be 
included in the calculation of outstanding issuance value until the

[[Page 67013]]

obligation to convert, redeem, or repurchase the digital asset for a 
fixed amount of monetary value is incurred. For example, an issuer may 
mint a digital asset that it keeps in treasury, but it would not be 
considered a payment stablecoin or included in the calculation of the 
issuer's outstanding issuance value until the digital asset was 
transferred to a third party or the issuer was otherwise obligated to 
convert, redeem, or repurchase the digital asset. Similarly, once an 
issuer permanently removes a payment stablecoin from circulation (e.g., 
burns the payment stablecoin), the digital asset would cease to be 
included in the calculation of outstanding issuance value.
---------------------------------------------------------------------------

    \30\ The OCC notes, however, that in certain situations, the OCC 
may consider a non-consolidated affiliate's issuance. For example, 
if a State qualified payment stablecoin issuer treats affiliate-
issued stablecoins as fungible with its own and appears to use 
affiliates to stay under the $10 billion threshold for transition to 
the Federal framework, such behavior could indicate an attempt to 
evade the GENIUS Act or could, depending on the facts and 
circumstances, indicate unusual and exigent circumstances within the 
meaning of section 7 of the GENIUS Act (12 U.S.C. 5906).
---------------------------------------------------------------------------

    Payment stablecoins for which holder access has been restricted 
pursuant to applicable law, regulation, or court order would remain 
payment stablecoins, as the issuer's obligation to convert, redeem, or 
repurchase for a fixed amount of monetary value continues and the 
associated reserves are maintained in segregated accounts pending 
resolution of the restriction. Likewise, if an issuer repurchased a 
payment stablecoin but did not burn the payment stablecoin, the 
stablecoin in the permitted payment stablecoin issuer's inventory would 
not be part of the issuer's outstanding issuance value because the 
issuer has no obligation to convert, redeem, or repurchase the 
stablecoin when it is in the issuer's inventory (but would become part 
of the outstanding issuance value if the permitted payment stablecoin 
issuer subsequently put the payment stablecoin back into circulation). 
Therefore, the definition of ``outstanding issuance value'' only 
includes payment stablecoins for which the permitted payment stablecoin 
issuer is obligated to convert, redeem, or repurchase for a fixed 
amount of monetary value (i.e., generally the issued payment 
stablecoins in circulation). The final rule also excludes the word 
``consolidated'' from the definition of outstanding issuance value. 
This is to better facilitate the use of SPV issuers under part 15. This 
revision makes clear that each SPV issuer only needs to have reserve 
assets backing the payment stablecoins that it issues. The OCC is 
adding the word ``consolidated'' to certain other provisions of part 15 
(relating to certain non-financial companies and nonbank State 
qualified payment stablecoin issuers) in light of this change and to 
maintain consistency with the requirements of the GENIUS Act.
    Payment stablecoin. The OCC proposed to define the term ``payment 
stablecoin'' consistent with the definition of the term in the GENIUS 
Act, 12 U.S.C. 5901(22), with certain technical changes. Under the 
proposal, the term ``payment stablecoin'' would have meant a digital 
asset (i) that is, or is designed to be, used as a means of payment or 
settlement; and (ii) the issuer of which (A) is obligated to convert, 
redeem, or repurchase for a fixed amount of monetary value, not 
including a digital asset denominated in a fixed amount of monetary 
value; and (B) represents that such issuer will maintain, or creates 
the reasonable expectation that it will maintain, a stable value 
relative to the value of a fixed amount of monetary value.\31\ For a 
digital asset to be a payment stablecoin under proposed part 15, the 
issuer must be obligated to convert, redeem, or repurchase the digital 
asset for a fixed amount of monetary value.
---------------------------------------------------------------------------

    \31\ The OCC interprets the statutory language in 12 U.S.C. 
5901(22) to mean that the permitted payment stablecoin issuer would 
be obligated to meet redemption requests at par.
---------------------------------------------------------------------------

    The proposed definition also provided that a ``payment stablecoin'' 
does not include a digital asset that is a (i) national currency; (ii) 
deposit (as defined in section 3 of the Federal Deposit Insurance Act 
(12 U.S.C. 1813)), including a deposit recorded using distributed 
ledger technology; or (iii) security, as defined in section 2 of the 
Securities Act of 1933 (15 U.S.C. 77b), section 3 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c), or section 2 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-2). The GENIUS Act's definition of 
``payment stablecoin'' also contains language clarifying that ``no 
bond, note, evidence of indebtedness, or investment contract that was 
issued by a permitted payment stablecoin issuer shall qualify as a 
security solely [because the issuer satisfies] the conditions in 
[paragraph (1) of the proposed ``payment stablecoin'' definition], 
consistent with section 17 of the Act.'' The GENIUS Act provides that 
this language was included ``for the avoidance of doubt.'' The OCC 
determined that it was not necessary to include this language in the 
proposed ``payment stablecoin'' definition because section 17 of the 
GENIUS Act includes amendments to the cited Federal statutes that 
clarify that payment stablecoins are not securities.
    The OCC received several comments addressing the definition of 
``payment stablecoin.'' Commenters generally sought a definition that 
more clearly distinguished payment stablecoins covered by the Act from 
other digital instruments. Commenters suggested that the OCC clarify 
the scope of the definition so that it captures instruments primarily 
designed and used for payment or settlement and excludes products that 
function instead as securities, investment instruments, tokenized 
deposits, closed-loop or community tokens, algorithmic tokens, or other 
nonpayment digital assets. Other commenters asked the OCC to clarify 
certain definitional boundaries (e.g., payment or settlement use, 
redemption obligations, reserve backing, and instruments structured 
under United States or foreign securities laws). One commenter stated 
that the definition should include products designed to circumvent the 
GENIUS Act. Some commenters stated that the term was appropriately 
defined.
    Commenters requested clarity regarding potential disclosures 
relating to the definition of payment stablecoin, with one commenter 
stating that the OCC should treat the core properties of a payment 
stablecoin--that it represents stable value and that it creates a 
reasonable appearance or expectation of redemption at or near par--
disjunctively in order to assess violations of marketing restrictions. 
The commenter further stated that, by treating either condition as 
sufficient, the OCC would prevent regulatory arbitrage, ensure 
consistent application of core protections, and maintain competitive 
neutrality. A different commenter stated that unregistered foreign 
payment stablecoin issuers of dollar-denominated crypto-assets 
purporting to hold a stable dollar-referenced value cannot use the term 
``payment stablecoin'' to describe such instruments. Section 4(e)(3) of 
the GENIUS Act (12 U.S.C. 5903(e)(3)) prohibits the marketing of 
products as payment stablecoins when they are not issued pursuant to 
the GENIUS Act. The Department of the Treasury has enforcement 
authority with respect to that provision of the Act, so the OCC is not 
addressing that marketing prohibition in this final rule.
    The OCC is adopting the definition as proposed. The proposed 
definition aligns with the statutory definition and thus appropriately 
captures the scope of instruments that are payment stablecoins under 
the GENIUS Act. As in the proposed definition, the OCC does not believe 
that it is necessary to separately specify that ``no bond, note, 
evidence of indebtedness, or investment contract that was issued by a 
permitted payment stablecoin issuer shall qualify as a security solely 
[because the issuer satisfies] the conditions in [paragraph (1) of the 
``payment stablecoin'' definition], consistent with section 17 of the 
Act'' because the GENIUS Act

[[Page 67014]]

amended the pertinent securities laws to specify that a payment 
stablecoin is not a security. Thus, including this language from 
section 2(22)(B)(iii) would be redundant. The OCC believes that other 
changes to the definition may risk deviating from the scope of 
instruments intended to be captured by the GENIUS Act's definitions. In 
response to specific comments, the OCC notes that instruments for which 
an issuer is not obligated to convert, redeem, or repurchase for a 
fixed amount of monetary value are outside the scope of the definition 
of ``payment stablecoin'' for purposes of part 15. Redefining ``payment 
stablecoin'' based on the characteristics noted by certain commenters 
would be inconsistent with the statutory definition. Because the 
definition of monetary value does not include payment stablecoins, a 
stablecoin that is redeemable for a payment stablecoin is not itself a 
payment stablecoin. Thus, for purposes of the OCC's implementation of 
the Act, a ``wrapped'' stablecoin generally would not be a payment 
stablecoin. The OCC does not believe that it is necessary to define 
payment or settlement. The statute merely requires that a payment 
stablecoin be, or be designed to be, used as a means of payment or 
settlement. It does not require that the primary purpose of the payment 
stablecoin be payment or settlement. In light of this fact, and the 
broad scope of what is generally included within payment or settlement, 
the OCC expects that most stablecoins could meet this prong of the 
definition of payment stablecoin. Accordingly, the OCC does not believe 
that it is necessary to further define ``payment'' or ``settlement'' 
for purposes of the definition of payment stablecoin. The OCC also 
believes that the definition appropriately and clearly excludes 
deposits, including deposits in tokenized form, and that additional 
revisions are not necessary to distinguish payment stablecoins from 
deposits.
    Payment stablecoin holder. The proposed rule did not define the 
term ``payment stablecoin holder'' but used the term in several 
sections and requested comment on whether to define ``stablecoin 
holder.'' The OCC received several comments concerning the definition 
of customer and payment stablecoin holder. Several comments recommended 
distinguishing the two terms, with ``customer'' referring to persons 
that interact directly with an issuer and ``payment stablecoin holder'' 
referring to beneficial owners of payment stablecoins (or, in some 
cases, beneficial and legal owners of payment stablecoins). One comment 
stated that the OCC should not define the term ``stablecoin holder.'' 
This commenter asserted that the GENIUS Act does not use the term (but 
rather uses the term ``holder of any payment stablecoin'') and stated 
that defining a new term would exceed the authority delegated to the 
OCC. This commenter also stated that the GENIUS Act concerns payment 
stablecoins only, so the term would be overbroad. Others stated that 
the OCC should define the term to include both legal and beneficial 
owners of payment stablecoins. These commenters stated that 
interpreting the term was within the OCC's interpretive authority.
    In response to these comments, the OCC is defining the term 
``payment stablecoin holder'' rather than ``stablecoin holder.'' This 
will clarify that the scope is limited to holders of payment 
stablecoins that are issued or held in custody by entities engaged in 
activities that are subject to the GENIUS Act. The final rule defines 
payment stablecoin holder to mean the beneficial owner of a payment 
stablecoin. The OCC is defining this term solely for purposes of the 
OCC's implementing regulations and doing so does not exceed the OCC's 
authority. The definition in the final rule does not affect, for 
example, the insolvency provisions in section 11 of the GENIUS Act. The 
definition will appropriately distinguish persons that merely control a 
payment stablecoin on another's behalf (e.g., custodians) from persons 
that would benefit economically from a payment of interest or yield on 
a payment stablecoin. This definition, combined with the change to the 
definition of customer, will help ensure that part 15 is not unduly 
burdensome and that the requirements with respect to payment stablecoin 
holders and customers are appropriately scoped. The OCC notes that the 
GENIUS Act uses the term ``payment stablecoin holder'' six times in 
other contexts in addition to the substantially similar phrase ``holder 
of any payment stablecoin'' in the context of the yield prohibition. 
The statute is unclear as to whether the term refers to any person that 
controls a payment stablecoin or rather the beneficial owner of a 
payment stablecoin. Clarifying this point is important to implementing 
the statutory prohibition against paying interest or yield solely in 
connection with the holding, use, or retention of a payment stablecoin 
in section 4(a)(11) of the GENIUS Act (12 U.S.C. 5903(a)(11)).
    Permitted payment stablecoin issuer. The OCC proposed to define the 
term ``permitted payment stablecoin issuer'' consistent with the 
definition of the term in the GENIUS Act, 12 U.S.C. 5901(23), with 
certain modifications. Specifically, the proposed definition would have 
limited the definition to the entities that are subject to the OCC's 
jurisdiction, including State qualified payment stablecoin issuers 
subject to the OCC's regulatory authority under section 4 of the GENIUS 
Act (12 U.S.C. 5903).\32\ In addition, the proposed definition cross-
referenced the relevant proposed implementing provision in place of the 
statutory provision included in the GENIUS Act's definition. Under the 
proposed rule, the term ``permitted payment stablecoin issuer'' would 
have meant a person formed in the United States that is a (1) 
subsidiary of an insured national bank or Federal savings association 
that has been approved to issue payment stablecoins under Sec.  15.30; 
(2) Federal qualified payment stablecoin issuer; or (3) State qualified 
payment stablecoin issuer subject to the OCC's regulatory or 
enforcement authority under section 4 of the GENIUS Act (12 U.S.C. 
5903).\33\
---------------------------------------------------------------------------

    \32\ See Scope section-by-section analysis, supra.
    \33\ In addition, the OCC has enforcement authority pursuant to 
section 7(e)(2) of the GENIUS Act (12 U.S.C. 5906(e)(2)) with 
respect to certain nonbank State qualified payment stablecoin 
issuers in unusual and exigent circumstances. Proposed Sec.  15.16 
would address the requirements applicable to certain State qualified 
payment stablecoin issuers under unusual and exigent circumstances, 
but the OCC is not proposing to include State qualified payment 
stablecoin issuers that come within the OCC's jurisdiction solely as 
a result of section 7(e)(2) of the GENIUS Act within the definition 
of permitted payment stablecoin issuer.
---------------------------------------------------------------------------

    The OCC received several comments addressing the definition of 
``permitted payment stablecoin issuer.'' Comments generally supported 
the definition but suggested clarifications to identify the responsible 
issuing entity while avoiding overinclusion of affiliated parties or 
service providers. Commenters also suggested that the OCC clarify which 
entities qualify as issuers (e.g., uninsured Federal branches, 
agencies, and multi-issuer payment stablecoin structures). Other 
commenters asked the OCC to distinguish between entities with primary 
legal and economic responsibility for issuing, redeeming, and backing 
payment stablecoins and service providers or intermediaries that 
perform ancillary technical, distribution, or support functions.
    The OCC is adopting the definition as proposed. The definition 
closely matches the statutory definition, with minor changes to reflect 
the OCC's jurisdiction. In response to comments, the OCC confirms that, 
consistent with the definition of payment stablecoin in section 2 of 
the GENIUS Act (12 U.S.C.

[[Page 67015]]

5901(22)), for the purposes of part 15, the permitted payment 
stablecoin issuer is the entity that is obligated to convert, redeem, 
or repurchase a tendered payment stablecoin for a fixed amount of 
monetary value (not including a digital asset denominated in a fixed 
amount of monetary value). A service provider that is not obligated to 
convert, redeem, or repurchase is not a permitted payment stablecoin 
issuer. Under the statute, a variety of entities may be permitted 
payment stablecoin issuers subject to the OCC's jurisdiction, including 
subsidiaries of insured national banks or Federal savings associations; 
Federal qualified payment stablecoin issuers that are approved by the 
OCC, comprising uninsured national banks, Federal branches, or nonbank 
entities; or State qualified payment stablecoin issuers that transition 
to the OCC's regulatory framework. As discussed above, due to changes 
in the definition of ``depository institution,'' an uninsured credit 
union would qualify as a nonbank and could seek to be a Federal 
qualified payment stablecoin issuer.
    Person. The OCC proposed to define the term ``person'' as the term 
is defined in the GENIUS Act, 12 U.S.C. 5901(24). As proposed, the term 
``person'' would have meant an individual, partnership, company, 
corporation, association, trust, estate, cooperative organization, or 
other business entity, incorporated or unincorporated.
    The OCC received a few comments addressing the definition of 
``person.'' Commenters generally agreed with the definition but sought 
clearer boundaries around which collective arrangements would be 
treated as associations. Commenters suggested that the OCC clarify that 
the definition applies to legally identifiable entities or organized 
groups capable of exercising governance or control. Other commenters 
also urged the OCC to address how the definition applies in 
decentralized or algorithmically governed structures, while another 
commenter supported keeping the definition broad.
    The OCC is adopting the definition as proposed. The statutory 
definition of ``person'' in section 2(24) of the Act (12 U.S.C. 
5901(24)) is broad and expressly includes individuals, partnerships, 
and both incorporated and unincorporated business entities. 
Accordingly, the OCC declines to exclude arrangements that are not 
legally identifiable as such arrangements may be included within the 
statutory definition. The OCC also declines to opine as to whether 
decentralized arrangements generally would constitute a person, as the 
determination would depend on the facts and circumstances of the 
arrangement. As with its other regulations, interested parties may 
request that the OCC provide interpretive guidance, as necessary.
    Principal shareholder. The OCC proposed to define the term 
``principal shareholder'' to mean a person who directly or indirectly 
or acting in concert with one or more persons, or together with members 
of their immediate family, will own, control, or hold 10 percent or 
more of the voting stock of the permitted payment stablecoin issuer or 
applicant. This definition is substantially similar to the definition 
used in the OCC's general licensing regulations in 12 CFR 5.20(d)(10).
    The OCC received a few comments addressing the definition of 
``principal shareholder.'' Commenters generally agreed with the 
definition but requested additional clarity regarding identifying 
control and significant ownership interests. Commenters suggested that 
the OCC clarify how the definition applies to governance rights and 
influences that may not take the form of traditional securities 
ownership. Other commenters suggested that the OCC clarify the meaning 
of ``acting in concert'' and align the definition with existing banking 
law concepts.
    The OCC is adopting the definition as proposed. As discussed above, 
the OCC believes that it is unnecessary to define ``acting in concert'' 
for purposes of 12 CFR part 15 at this time. The OCC also believes that 
it is unnecessary to change the definition of principal shareholder. 
Retaining the proposed definition would maintain parity between the 
treatment of permitted payment stablecoin issuers and national banks 
and Federal savings associations.
    Private key. The OCC proposed to define the term ``private key'' to 
mean the unique alphanumeric string that allows an individual to 
transfer a particular unit of a digital asset using a distributed 
ledger. While the preamble to the proposal noted that this definition 
was intended to include shards of a private key,\34\ several commenters 
noted that the definition in the regulatory text nonetheless implies a 
static single-key architecture and does not easily fit with a 
distributed-key architecture, wherein cryptographic key shares are 
distributed across independent parties or hardware environments such 
that the full key material is not held in any one place and exists only 
as a mathematical construct realized at the moment of signing. The OCC 
has decided to modify the definition to more expressly address 
sharding. Under the final rule, private key means the cryptographic 
material, whether held in whole, in shares, or reconstructed 
ephemerally, that confers the ability to authorize a transaction on a 
distributed ledger.
---------------------------------------------------------------------------

    \34\ Sharding refers to dividing a private key into distinct 
pieces for enhanced security.
---------------------------------------------------------------------------

    Publicly available information. The OCC proposed to define the term 
``publicly available information'' to mean any information that a 
person has a reasonable basis to believe is lawfully made available to 
the general public from: (1) Federal, State, or local government 
records; (2) widely distributed media; (3) disclosures to the general 
public that are required to be made by Federal, State, or local law; or 
(4) a distributed ledger.\35\
---------------------------------------------------------------------------

    \35\ As noted above, the term ``distributed ledger'' is limited 
to publicly available and accessible ledgers.
---------------------------------------------------------------------------

    The OCC received a few comments addressing the definition of 
``publicly available information.'' Commenters generally suggested that 
the OCC provide clearer treatment of blockchain-based information 
within the privacy framework. Some commenters suggested that the 
definition should apply to distributed ledger or on-chain transaction 
data. Other commenters suggested that privacy protections should not be 
eliminated where issuers can control disclosure or where transaction 
data can be linked to identifiable individuals. Other commenters 
suggested that certain transaction-level data should be treated as 
protected financial records rather than excluded from coverage 
altogether.
    The OCC is adopting the definition as proposed. The OCC believes 
that this approach, combined with revisions to Sec.  15.13 and to the 
definitions of customer and nonpublic personal information, 
appropriately provides a robust data protection requirement with 
respect to customers of a permitted payment stablecoin issuer. As 
discussed in greater detail above, in response to commenters, the 
revisions to the definition of nonpublic personal information discussed 
above further emphasize that information broadly available through a 
distributed ledger would generally be outside the scope of nonpublic 
personal information.
    Registered public accounting firm. The OCC proposed to define the 
term ``registered public accounting firm'' as provided in the GENIUS 
Act, 12 U.S.C. 5901(26). Under the proposal, the term ``registered 
public accounting firm'' would have meant a registered public 
accounting firm set forth in section 2 of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7201). The OCC received no

[[Page 67016]]

comments addressing the definition of ``registered public accounting 
firm.'' The OCC is adopting the definition as proposed.
    Related interest. The OCC proposed to define the term ``related 
interest'' of a person to mean (1) a company that is controlled by that 
person; or (2) a political or campaign committee that is controlled by 
that person or the funds or services of which will benefit that person. 
This term is relevant to the risk management standards for insider and 
affiliate transactions and is derived from the definition in Regulation 
O (12 CFR part 215). The OCC received no comments addressing the 
definition of ``related interest.'' The OCC is adopting the definition 
as proposed.
    Reserve asset. The OCC proposed to define the term ``reserve 
asset'' to mean an asset maintained by a permitted payment stablecoin 
issuer of a type enumerated in Sec.  15.11(b).\36\ The OCC received no 
comments addressing the definition of ``reserve asset.'' The OCC is 
adopting the definition as proposed.
---------------------------------------------------------------------------

    \36\ A permitted payment stablecoin issuer may maintain reserve 
assets at a custodian.
---------------------------------------------------------------------------

    Reserve asset value. The final rule defines reserve asset value to 
mean the sum of: (1) the total fair value of reserve assets, net of any 
associated liabilities, other than United States coins and currency; 
and (2) the total face value of reserve assets comprising United States 
coins and currency. The proposed rule did not include this term. 
Rather, it required all reserve assets to be valued at fair value for 
the purpose of ensuring that the total outstanding issuance value is 
backed on at least a 1 to 1 basis by reserve assets. The OCC is 
adopting this new term because, in the case of United States coins and 
currency, it is more appropriate to value these items based on face 
value. This confirms, for instance, that a permitted payment stablecoin 
issuer may not back a payment stablecoin based on the metallic or 
collector value associated with a particular coin (which may be 
volatile). The OCC acknowledges that the use of coins or currency to 
back a payment stablecoin is likely to be rare. Thus, in most 
instances, reserve asset value will be determined purely by the fair 
value of reserve assets. The final rule also clarifies that reserve 
asset value is calculated net of associated liabilities. Notably, this 
makes clear that assets that a permitted payment stablecoin issuer is 
obligated to repurchase under a repurchase agreement may not be 
essentially double counted when determining the permitted payment 
stablecoin issuer's reserve asset value. If, for example, an issuer 
holds a Treasury security as a reserve asset and pledges the security 
pursuant to a repurchase agreement, the issuer would include the cash 
received under the repurchase agreement in its reserve asset value but 
must also subtract its obligation to repurchase the Treasury security.
    Senior management. Proposed Sec. Sec.  15.14(i) and 15.42(a)(5) 
referred to the senior management of a permitted payment stablecoin 
issuer. The proposal did not define the term but sought comment on 
whether to do so. The OCC received a few comments stating that the term 
should align with ``executive officers'' or a subset thereof. One 
commenter said that a formal definition was not necessary, but the term 
should be read to include the individuals responsible for day-to-day 
management, rather than looking to titles alone. Section 15.42 refers 
to senior management only in a list of examples of factors the OCC may 
consider. Accordingly, the OCC does not believe that a definition is 
necessary for senior management in Sec.  15.42. With respect to Sec.  
15.14, as discussed in greater detail below, the OCC is providing 
additional specificity as to which executive officers must attest to 
each quarterly report. The final rule, like the proposal, does not 
define ``senior management.''
    Sensitive customer information. One commenter requested that the 
OCC either define ``sensitive customer information'' or else replace 
the term with customer nonpublic information. To provide greater 
clarity, under the final rule, ``sensitive customer information'' means 
any combination of components of customer information that would reveal 
the identity of the customer or allow someone access to the customer's 
account, including a customer's public key in conjunction with the 
customer's private key.
    Share account. The final rule includes the new term ``share 
account.'' Under the final rule, this term means an ``account'' as 
defined in section 101 of the Federal Credit Union Act (12 U.S.C. 
1752(5)). The term is relevant to the reserve asset provisions in Sec.  
15.11 and the operational backstop provisions in Sec.  15.41.
    Stablecoin Certification Review Committee. The OCC proposed to 
define the term ``Stablecoin Certification Review Committee'' 
consistent with the definition in the GENIUS Act, 12 U.S.C. 5901(27) by 
incorporating the statutory definition. The proposed rule defined the 
term ``Stablecoin Certification Review Committee'' as having the 
meaning set forth in section 2 of the GENIUS Act (12 U.S.C. 5901(27)). 
The OCC received no comments addressing the definition of ``Stablecoin 
Certification Review Committee.'' The OCC is adopting the definition as 
proposed.
    State. The OCC proposed to define the term ``State'' as provided in 
the GENIUS Act, 12 U.S.C. 5901(28). The proposed rule defined the term 
``State'' to mean each of the several States of the United States, the 
District of Columbia, and each territory of the United States.\37\ The 
OCC received no comments addressing the definition of ``State.'' The 
OCC is adopting the definition as proposed.
---------------------------------------------------------------------------

    \37\ United States territories are also referenced in the 
proposed definition of ``foreign payment stablecoin issuers.'' The 
GENIUS Act and the proposed and final rules address the potential 
overlap created by the inclusion of territories in both definitions 
by defining ``foreign payment stablecoin issuers'' to exclude 
``permitted payment stablecoin issuers.'' Therefore, if a payment 
stablecoin issuer is a ``permitted payment stablecoin issuer'' 
because it is a ``State qualified payment stablecoin issuer'' that 
is legally established under the laws of a territory of the United 
States then by definition it cannot be a ``foreign payment 
stablecoin issuer.''
---------------------------------------------------------------------------

    State-chartered depository institution. The OCC proposed to define 
the term ``State-chartered depository institution'' as provided in the 
GENIUS Act, 12 U.S.C. 5901(29). Specifically, the proposed rule would 
have defined the term ``State-chartered depository institution'' as 
having the meaning as set forth for ``State depository institution'' in 
section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 
1813(c)(5)). The OCC received no comments addressing the definition of 
``State-chartered depository institution.'' The final rule, however, 
does not use the term. The final rule therefore does not adopt the 
term.
    State payment stablecoin regulator. The OCC proposed to define the 
term ``State payment stablecoin regulator'' as provided in the GENIUS 
Act, 12 U.S.C. 5901(30). As such, the OCC proposed to define ``State 
payment stablecoin regulator'' to mean a State agency that has primary 
regulatory and supervisory authority in such State over entities that 
issue payment stablecoins. The OCC received no comments addressing the 
definition of ``State payment stablecoin regulator.'' The OCC is 
adopting the definition as proposed.
    State qualified payment stablecoin issuer. The OCC proposed to 
define the term ``State qualified payment stablecoin issuer'' 
consistent with the definition of that term in the GENIUS Act, 12 
U.S.C. 5901(31), with a non-substantive, clarifying change. Under the 
proposed rule, the term ``State qualified payment stablecoin issuer'' 
would have meant an entity that is (1) legally established under the 
laws of a

[[Page 67017]]

State and approved to issue payment stablecoins by a State payment 
stablecoin regulator; and (2) not an uninsured national bank chartered 
by the OCC pursuant to title LXII of the Revised Statutes, a Federal 
branch, an insured depository institution, or a subsidiary of such an 
uninsured national bank, Federal branch, or insured depository 
institution. The proposed definition clarified the definition of 
``State qualified payment stablecoin issuer'' provided in the GENIUS 
Act by adding the phrase ``an uninsured'' before the term ``national 
bank'' in the list of excluded subsidiaries to parallel the description 
of excluded entities in the preceding list. The OCC received no 
comments addressing the definition of ``State qualified payment 
stablecoin issuer.'' The OCC is making one clarifying edit, replacing 
the term ``entity'' with the term ``person,'' because ``person'' is a 
defined term in the final rule. Otherwise, the OCC is adopting the 
definition as proposed.
    Subsidiary. The OCC proposed to define the term ``subsidiary'' as 
provided in the GENIUS Act, 12 U.S.C. 5901(32). Specifically, the 
proposed rule would have defined the term ``subsidiary'' as having the 
meaning set forth in section 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813(w)(4)). Because the term in section 3 of the Federal 
Deposit Insurance Act relies on the definitions of ``company'' and 
``control'' in section 2 of the Bank Holding Company Act, the OCC 
proposed to incorporate those definitions in proposed part 15, tailored 
to the extent necessary, as described above.
    The OCC received no comments addressing the definition of 
``subsidiary.'' The OCC is adopting the definition as proposed.
    Tokenized form. The proposed rule did not define ``tokenized form'' 
but used the term in Sec.  15.11 and Sec.  15.32. The OCC received 
several comments requesting that the OCC clarify the meaning of the 
term ``tokenized form.'' Under section 4(a)(1)(A)(viii) (12 U.S.C. 
5903(a)(1)(A)(viii)) of the GENIUS Act, certain reserve assets may be 
in tokenized form, but the Act does not define what constitutes 
tokenized form. Commenters generally agreed that any definition should 
ensure that a reserve asset in tokenized form provides the same legal 
rights as a reserve asset in non-tokenized form. Several commenters 
urged the OCC to provide clearer and more coordinated standards for 
tokenized reserve assets, including through coordination with the SEC, 
Federal Reserve, FDIC, CFTC, FinCEN, and Treasury and, in some cases, a 
joint policy statement or standardized supervisory assessment 
framework. Some commenters stated that tokenized forms of otherwise 
eligible reserve assets should be presumptively permissible and 
evaluated under a principles-based approach focused on economic 
substance, legal certainty, enforceable and bankruptcy-remote claims to 
the underlying assets, custody and segregation protections, and the 
issuer's ability to promptly monetize the assets to meet redemptions. 
Several commenters suggested that eligibility should not depend on the 
technology used to record ownership. Some commenters urged the OCC to 
provide a transparent approval process or public list of permissible 
tokenized reserve assets. Other commenters suggested that case-by-case 
approval should not be required and that assets approved in 
conventional form should automatically be permitted in tokenized form.
    The OCC agrees with commenters that it is important to define 
``tokenized form'' and to ensure that reserve assets in tokenized form 
provide the same rights as reserves in non-tokenized form. The final 
rule defines ``tokenized form'' to mean, with respect to an asset, 
that: (1) the authoritative record of the asset is maintained using 
distributed ledger technology, regardless of whether a corresponding 
non-tokenized instrument or account entry also exists; and (2) the 
legal rights conferred by the asset are identical to those that would 
be conferred by a non-tokenized form of the asset under applicable law. 
This definition is generally consistent with the scope of the term 
``tokenized security'' in the Federal Banking Agencies FAQ concerning 
tokenized securities.\38\ The definition includes a digital asset that 
represents, and provides identical legal rights as, a traditionally 
issued asset as well as a digitally native asset that provides the 
identical legal rights as a non-tokenized version of the same asset. 
For example, a money market fund that qualified as a permissible 
reserve asset under section 4(a)(1)(A)(vi) of the Act (12 U.S.C. 
5903(a)(1)(A)(vi)) could be held in tokenized form if the fund was 
issued directly on a distributed ledger. Alternatively, a token 
representing ownership of a traditionally issued money market fund 
could also be a reserve in tokenized form, depending on how the 
tokenization was implemented and which rights would be conferred on the 
holder. In such instances, the tokens would need to provide identical 
rights to those associated with owning the asset held in custody. The 
OCC encourages any permitted payment stablecoin issuer that seeks 
clarity on whether a specific asset is an asset in tokenized form and 
whether such asset qualifies as a permissible reserve asset under Sec.  
15.11(b) to consult with the OCC as to whether the asset qualifies.
---------------------------------------------------------------------------

    \38\ See OCC Bulletin 2026-7, ``Regulatory Capital: Interagency 
FAQs on Tokenized Securities'' (March 5, 2026), <a href="https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-7.html">https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-7.html</a>.
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    Trading volume. The OCC proposed to define the term ``trading 
volume'' to mean the aggregate number of payment stablecoins issued by 
a permitted payment stablecoin issuer that were purchased or sold on 
exchanges during a specified period of time. In the proposal, the term 
was to be used as a metric to determine a permitted payment stablecoin 
issuer's examination schedule.
    The OCC received several comments addressing the definition of 
``trading volume.'' Commenters suggested that the definition be revised 
to be more analytically useful, operationally feasible, and tailored to 
the realities of digital asset markets. Commenters suggested that the 
OCC distinguish trading activity from settlement activity. Other 
commenters suggested that the OCC clarify the scope of ``exchange,'' 
particularly how it applies to centralized and decentralized platforms, 
while limiting reporting expectations to data reasonably available to 
issuers.
    The final rule eliminates the term ``trading volume'' because, as 
described below, the final rule does not use trading volume as a metric 
to determine a permitted payment stablecoin issuer's examination 
schedule. Permitted payment stablecoin issuers would be required to 
provide certain information concerning trading volume as part of the 
reports required under Sec.  15.14 of the final rule, but the OCC has 
concluded that the instructions for the reporting form are the more 
appropriate place to define ``trading volume'' for those purposes.
    United States customer. The OCC proposed to define the term 
``United States customer'' to mean a customer that resides in the 
United States. The OCC received several comments addressing the 
definition of ``United States customer.'' Commenters suggested that the 
OCC adopt a clearer and more administrable standard for identifying 
United States customers. Commenters generally supported further 
clarification of the term. Some commenters sought clarification on how 
United States residence or location should be determined, whether the 
definition should be tied to direct customer relationships, and how it

[[Page 67018]]

should apply to institutional customers, foreign intermediaries, and 
secondary-market activity. Some commenters suggested that the OCC adopt 
an approach that is more operationally workable and aligned with 
jurisdictional boundaries. Other commenters cautioned against creating 
a definition that assumes a level of precision issuers may not be able 
to achieve. To provide additional clarity, the final rule revises Sec.  
15.31(a)(3) (discussed in greater detail below) and redefines ``United 
States customer'' to mean a customer that, at the time of onboarding: 
(1) is an individual and resides in the United States,\39\ (2) is 
incorporated or organized under the laws of the United States or any 
State; or (3) has its principal place of business in the United 
States.\40\ Specifying both when and how a person is determined to be a 
United States customer will enhance the operability of this provision 
of the final rule and provide clear lines for foreign payment 
stablecoin issuers and customers. This definition does not affect the 
definition of ``customer'' for purposes of other laws and regulations, 
including privacy laws and the Bank Secrecy Act and its implementing 
regulations.
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    \39\ For the purposes of determining residence in the United 
States, United States citizens are considered to be residents. For 
non-United States citizens, residence is determined by the test in 
26 CFR 301.7701(b)-1. Pursuant to that test, an individual will be 
considered to be residing in the United States if he or she is a 
lawful permanent resident (i.e., has a green card) or meets the 
substantial presence test. 26 CFR 301.7701(b)-1(b) and (c).
    \40\ See Hertz Corp. v Friend, 559 U.S. 77 (2010) (describing 
the test for what constitutes a corporation's principal place of 
business).
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4. Severability (Sec.  15.3)
    Proposed Sec.  15.3 provided that the provisions of the proposed 
rule were separate and severable from one another. If any provision is 
stayed or determined to be invalid, it was the OCC's intention that the 
remaining provisions would have continued in effect.
    As noted in the proposal,\41\ the OCC generally intends all of its 
rulemakings to be severable to the extent portions of the rule are 
determined to be invalid regardless of the presence of a severability 
clause. The OCC proposed to include an explicit severability clause 
because of the novelty and scope of the GENIUS Act and the importance 
of ensuring as much certainty as possible for the regulatory framework 
for payment stablecoins.
---------------------------------------------------------------------------

    \41\ 91 FR 10210.
---------------------------------------------------------------------------

    The OCC received no comments addressing Sec.  15.3 and is 
finalizing Sec.  15.3 as proposed.
5. Reservation of Authority (Sec.  15.4)
    The OCC is adding, in the final rule, a general reservation of 
authority provision. Section 15.4 provides that the OCC may waive or 
modify the requirements of part 15 or adopt different procedures 
implementing this part, as necessary, to administer and carry out the 
requirements of the GENIUS Act (12 U.S.C. 5901 et seq.), including with 
respect to ensuring financial stability, ensuring timely redemption of 
payment stablecoins, and protecting the claims of payment stablecoin 
holders. The OCC is adopting this provision in recognition of the 
nascent nature of the stablecoin industry and the novelty of the GENIUS 
Act framework. The OCC will only exercise this reservation of authority 
where consistent with the GENIUS Act and where circumstances justify 
its use. The OCC generally uses reservations sparingly to address 
unanticipated circumstances for which a rulemaking is not appropriate.

B. Subpart B--Permitted Payment Stablecoin Issuers and State Qualified 
Payment Stablecoin Issuers

1. Activities (Sec.  15.10)
a. Overview of Changes From Proposed Rule to Final Rule for Sec.  15.10
    The OCC is adopting Sec.  15.10 as proposed with modifications, as 
described below.
    The OCC is modifying the language in paragraph (a) for clarity and 
replacing the word ``only'' with ``not engage in any activity other 
than the following:'' to make clear that the list of activities in 
final Sec.  15.10(a) is an exclusive list of activities that permitted 
payment stablecoin issuers may engage in. Within the Sec.  15.10(a) 
list of permitted activities for permitted payment stablecoin issuers, 
the OCC is adopting Sec.  15.10(a)(1) through (7) as proposed.
    The OCC is adopting Sec.  15.10(a)(8), renumbered as Sec.  
15.10(a)(11), as proposed except for a clarification that other 
activities include the hiring of third parties.
    The OCC is adding three new activities to the list of permitted 
activities. First, in new Sec.  15.10(a)(8) of the final rule, the 
agency allows permitted payment stablecoin issuers to hold as principal 
non-payment stablecoin digital assets as necessary to pay fees, 
including customer fees and network fees, or to conduct necessary 
testing on distributed ledger-based platforms, provided that such 
principal holdings shall not exceed quantities necessary for the 
reasonably foreseeable conduct of such activities. Second, in Sec.  
15.10(a)(9) of the final rule, the OCC allows permitted payment 
stablecoin issuers to establish a trust arrangement under applicable 
law for reserve assets, including the granting of a security interest 
in reserve assets, provided that any security interest in reserve 
assets granted to the trustee is for the sole benefit of payment 
stablecoin holders, the arrangement with the trustee does not impair 
the permitted payment stablecoin issuer's ability to timely redeem 
payment stablecoins in the normal course of business prior to default, 
the arrangement does not introduce claims that would compete with the 
claims of payment stablecoin holders of payment stablecoins issued by 
the permitted payment stablecoin issuer in the event of the insolvency 
of the permitted payment stablecoin issuer, and the arrangement with 
the trustee does not impair the ability of a receiver of the permitted 
payment stablecoin issuer to direct the prompt transfer or liquidation 
of the reserve assets in order to pay claims to payment stablecoin 
holders. Third, the OCC is adding the management of foreign exchange 
risk, subject to the requirements of Sec.  15.13(a)(10) of the final 
rule, as a permitted activity. Section 15.13(a)(10) of the final rule 
provides the relevant risk management principles for foreign exchange 
risk.
    The OCC is adopting the rule of construction in Sec.  15.10(b) as 
proposed, renumbered as Sec.  15.10(b)(1). Additionally, the OCC is 
adopting an additional provision in final Sec.  15.10(b)(2) that 
provides that nothing in Sec.  15.10(a) limits the authority of a 
permitted payment stablecoin issuer to engage in an activity consistent 
with section 4(a)(7)(B) of the Act (12 U.S.C. 5903(a)(7)(B)). This 
change is made to clarify that permitted payment stablecoin issuers may 
engage in digital asset service provider activities specified by the 
Act, and activities incidental thereto, that are authorized by the OCC 
and independently authorized by applicable Federal or State law, to the 
extent that any such State law is not inconsistent with Federal law.
    Within the list of prohibitions listed in Sec.  15.10(c), the OCC 
is adopting Sec.  15.10(c)(1) through (3), and (c)(6) as proposed. The 
agency is modifying Sec.  15.10(c)(4) to eliminate the rebuttable 
presumption in Sec.  15.10(c)(4)(i) through (iii) and to replace the 
use of ``holder of any payment stablecoin'' with ``payment stablecoin 
holder,'' which is now a defined term, in Sec.  15.10(c)(4).

[[Page 67019]]

Additionally, the OCC is making clarifying edits to Sec.  15.10(c)(5) 
to remove paragraph (c)(5)(iii)(C) and add new Sec.  15.10(d), which 
provides that pursuant to section 4(a)(2)(ii) of the GENIUS Act (12 
U.S.C. 5903(a)(2)(ii)) and Sec.  15.10(c)(5)(iii)(B), the OCC approves, 
for all permitted payment stablecoin issuers, repurchase agreements 
wherein the Treasury bills that are sold as purchased securities have a 
maturity of 93 days or less. The OCC is also modifying paragraph 
(c)(5)(iii)(B) to provide that a permitted payment stablecoin issuer 
may receive approval of a repurchase agreement by order or pursuant to 
final Sec.  15.10(d).
b. Description of Proposed Rule, Comments, and Final Rule
    Enumerated Permissible Activities in Sec.  15.10(a)(1) Through (4): 
Core Statutory Activities
    Consistent with the statute, the OCC proposed to mirror the 
permitted activities set forth in section 4(a)(7)(A) of the GENIUS Act 
(12 U.S.C. 5903(a)(7)(A)) in proposed Sec.  15.10(a)(1) through (4), 
which include: (1) issuing payment stablecoins; (2) redeeming payment 
stablecoins; (3) managing reserves related to the issuance or 
redemption of payment stablecoins, including purchasing, selling, and 
holding reserve assets or providing custodial services for reserve 
assets, consistent with applicable State and Federal law; and (4) 
providing custodial or safekeeping services for payment stablecoins, 
required reserves, or private keys of stablecoins consistent with the 
GENIUS Act, as implemented in proposed subpart C. Additionally, 
consistent with section 4(a)(7)(A)(v) of the GENIUS Act (12 U.S.C. 
5903(a)(7)(A)(v)), proposed Sec.  15.10(a)(8) provided that a permitted 
payment stablecoin issuer may undertake any other activities that 
directly support any of the activities in proposed Sec.  15.10(a)(1) 
through (4).
    With respect to the activities enumerated in proposed Sec.  
15.10(a)(1) through (4) as implementations of section 4(a)(7)(A)(i) 
through (iv), commenters did not express substantive concerns. Two 
commenters offered suggestions about how the agency should list or 
otherwise recognize additional permissible activities, including 
integration with payment networks and development of compliance tools. 
One comment suggested the regulation remain narrowly focused such that 
stablecoin issuers may engage in necessary activities, but any 
additional activities should be closely connected to stablecoin 
issuance.
    With respect to integration with payment networks and development 
of compliance tools, without more information, the OCC cannot determine 
whether such activities are permissible. While these activities might 
qualify as directly supporting activities pursuant to final Sec.  
15.10(a)(11), the OCC would need to assess the facts underlying these 
activities prior to making such a determination. The OCC invites 
permitted payment stablecoin issuers to seek clarification from the OCC 
as to whether a particular activity is permissible. For the list of 
enumerated permissible activities in Sec.  15.10(a)(1) through (4), the 
agency declines to focus only on necessary activities and activities 
closely connected to stablecoin issuance. The commenter's requirement 
of a close connection to stablecoin issuance alters the statutory test 
and does not account for activities that are authorized, such as 
redemption of payment stablecoins, managing related reserves, and 
providing custodial or safekeeping services. Accordingly, the OCC is 
adopting Sec.  15.10(a)(1) through (4) as proposed, with a clarifying 
edit in paragraph (a) to replace the word ``only'' with ``not engage in 
any activity other than the following:'' to make clear that the list of 
activities in final Sec.  15.10(a) is an exclusive list of activities 
that permitted payment stablecoin issuers may engage in.
Activities that Directly Support: Proposed Sec.  15.10(a)(8), 
Renumbered as Final Sec.  15.10(a)(11)
    In proposed Sec.  15.10(a)(8), consistent with section 
4(a)(7)(A)(v) of the GENIUS Act (12 U.S.C. 5903(a)(7)(A)(v)), the OCC 
included a provision that would have provided that permitted payment 
stablecoin issuers may undertake any other activities that directly 
support the issuance of payment stablecoins, redemption of payment 
stablecoins, managing reserves related to the issuance or redemption of 
payment stablecoins, or providing custodial or safekeeping services for 
payment stablecoins. One such example of an activity that would qualify 
under proposed Sec.  15.10(a)(8) because it directly supports both 
issuance and redemption of payment stablecoins would be the permitted 
payment stablecoin issuer's holding of non-payment stablecoin digital 
assets as principal necessary for testing a distributed ledger, whether 
internally developed or acquired from a third party. Such an activity 
may be necessary to ensure that the permitted payment stablecoin issuer 
may operate safely and effectively on a distributed ledger.\42\
---------------------------------------------------------------------------

    \42\ As discussed infra, this activity is enumerated as a 
permissible activity, subject to certain conditions in final rule 
Sec.  15.10(a)(8).
---------------------------------------------------------------------------

    Several commenters suggested the OCC provide additional examples of 
activities that directly support such activities or otherwise indicate 
that such activities are broader than what the proposed rule 
illustrated. Among these commenters, one argued that the above example 
(holding non-payment stablecoin digital assets as principal for testing 
a distributed ledger) could imply the agency would limit permissible 
activities that directly support to those that are necessary. This 
commenter suggested a broader definition. Various commenters suggested 
the agency provide specific examples of directly supporting activities, 
and some commenters offered examples. Such examples included, among 
other things, the operation of distributed ledger nodes, smart contract 
deployment, wallet infrastructure and key management, blockchain 
transaction monitoring, and settlement and liquidity services.
    As an alternative to listing examples, one commenter suggested that 
the agency publish separate interpretive guidance specifically on the 
scope of proposed Sec.  15.10(a)(8) activities. Several commenters 
suggested the agency take a narrow understanding of ``directly 
support'' in section 4(a)(7)(A)(v) of the Act (12 U.S.C. 
5903(a)(7)(A)(v)). These commenters suggested a broad interpretation 
could allow such activities to expand over time or overlap with 
activities that generally require State licensing. One commenter 
recommended that activities permissible under the ``directly support'' 
prong should only be those that materially facilitate certain other 
permitted activities or are operationally necessary for those 
activities.
    Congress's use of ``directly support'' demonstrates the statute 
does not limit permitted activities to those that are necessary for one 
of the statute's enumerated activities.\43\ Such a reading would add a 
substantive limitation--namely, that the activities be strictly 
necessary--that is absent from the text of the statute. Given the 
innovation in the payment stablecoin industry, a limitation of 
``directly support'' to what

[[Page 67020]]

is strictly necessary for one current operational model could also 
stifle innovation. The above example of holding crypto-assets as 
principal for testing does not necessarily illustrate the outer 
perimeter of activities that fit under the ``directly support'' prong; 
it is only intended to be a clarifying example.
---------------------------------------------------------------------------

    \43\ In addition, Congress uses the word ``necessary'' in other 
sections of the Act. See, e.g., sections 4(a)(4)(A)(i)(III) and 
7(e)(1)(C) of the Act (12 U.S.C. 5903(a)(4)(A)(i)(III) and 
5906(3)(1)(C)). This is important because ``Congress generally acts 
intentionally when it uses particular language in one section of a 
statute but omits it in another.'' Dep't of Homeland Sec. v. 
MacLean, 574 U.S. 383, 391 (2015) (citation modified).
---------------------------------------------------------------------------

    With respect to the examples for which commenters requested 
clarification, the OCC declines to opine on the permissibility of such 
activities in the final rule without additional information. The OCC 
encourages permitted payment stablecoin issuers to seek clarification 
from the OCC regarding the permissibility of such activities.
    One commenter suggested the agency adopt a brand- and technology-
neutral interpretation of the Act's ``directly support'' language. As 
indicated above, the agency is aware technology and business models may 
change substantially. To avoid locking industry participants into the 
current standards that may quickly become outdated and run counter to 
the Act's goals, the OCC plans to, consistent with its general 
technology-neutral approach, follow a brand- and technology-neutral 
understanding of the ``directly support'' language in the statute and 
rule.
    Some comments combined discussion of the scope of proposed Sec.  
15.10(a)(8) permissible activities with discussion of the appropriate 
risk management practices. One such commenter stated that some of the 
activities under proposed Sec.  15.10(a)(8) may entail novel risks. 
Refer to the discussion below on Sec.  15.13 for more about appropriate 
risk management practices.
    One commenter stated that the list of enumerated activities in 
proposed Sec.  15.10(a) is incomplete and risks being read as an 
exclusive list. The commenter suggested other activities that should 
qualify, including the facilitation of independently provided customer 
rewards and benefits, liquidity management, and interaction with third-
party protocols or distributed ledger infrastructure.
    Without additional information, the OCC declines to add the 
facilitation of independently provided customer rewards as an 
enumerated activity. The OCC expects liquidity management generally to 
be permissible as an activity that directly supports issuance, 
redemption, and the management of reserves. With respect to interaction 
with third-party protocols or distributed ledger infrastructure, 
without additional information, the OCC cannot categorically determine 
whether such activities are permissible in the final rule. However, 
permitted payment stablecoin issuers may seek additional clarity from 
the OCC to the extent issuers have questions on the permissibility of 
an activity. With respect to the list in Sec.  15.10(a) being 
incomplete, the OCC may amend these regulations over time, including 
the list of enumerated activities.
    As discussed in more detail below, in the final rule, the OCC is 
adopting proposed Sec.  15.10(a)(8), renumbered as Sec.  15.10(a)(11), 
with a change to explicitly permit the hiring of third parties to 
engage in certain activities.
Third-Party Investment Advisers, Asset Managers, and Separately Managed 
Accounts
    Several comments spoke to the permissibility of permitted payment 
stablecoin issuers hiring third-party investment advisers or asset 
managers of separately managed accounts, where a custodian controls 
investment decisions within parameters set by the owner. Some 
commenters stated that separately managed accounts can be an 
operationally prudent tool because they allow reserve assets to remain 
legally owned and controlled by the issuer while improving transparency 
and reducing operational risk. Some of these commenters argued these 
investment advisers and asset managers would directly support the 
management of reserves and reserves' liquidity under Sec.  15.10(a)(3) 
of the proposed rule. Thus, these commenters argued that a stablecoin 
issuer may hire investment advisers or asset managers under proposed 
Sec.  15.10(a)(8). One prospective stablecoin issuer asked for 
confirmation that its particular structure with a third-party reserve 
manager would be permissible.
    The OCC agrees that a permitted payment stablecoin issuer may use 
an investment adviser or asset manager and may use a separately managed 
account for reserve assets because such arrangements directly support 
stablecoin issuance and reserve management. Accordingly, the OCC is 
clarifying in final Sec.  15.10(a)(11) that a permitted payment 
stablecoin issuer may undertake any other activities, including the 
hiring of third parties, that directly support any of the activities 
described in Sec.  15.10(a)(1) through (a)(4). The hiring of third-
party investment advisers or asset managers is an example of an 
activity that is permissible under Sec.  15.10(a)(11) of the final 
rule. However, such activities should be designed to ensure compliance 
with the GENIUS Act, 12 CFR part 15, and other applicable laws and 
regulations.
Collateral Trustee Arrangements
    A few commenters addressed the topic of collateral trustee 
arrangements. As explained in the preamble to the proposed rule, a 
collateral trustee arrangement involves a permitted payment stablecoin 
issuer granting a first-priority security interest in reserve assets to 
the collateral trustee for the benefit of stablecoin holders. The 
proposal asked for comments on whether collateral trustee arrangements 
would protect the reserve assets.
    Many commenters responded that the OCC should expressly permit 
collateral trustee arrangements used solely for the benefit of 
stablecoin holders. Several of those commenters stated that the 
rehypothecation prohibition applies to issuer self-dealing in which 
issuers exploit reserve assets for their own benefit. Those commenters 
noted that a collateral trustee arrangement is intended to further the 
purposes behind the prohibition against rehypothecation, in that it 
exists to ensure that reserves remain available to back outstanding 
payment stablecoins, protect stablecoin holders, and promote financial 
stability. Several commenters supported requirements for permitted 
payment stablecoin issuers to include disclosures for holders related 
to a collateral trustee arrangement. Commenters advocated for 
disclosures involving the identity and regulatory status of the 
trustee, the nature and scope of the security interest, the 
circumstances in which the trustee may enforce its rights, and any 
limitations on the issuer's ability to access or substitute reserve 
assets. Some commenters also advocated for requirements that issuers 
obtain express and affirmative consent from holders regarding the 
collateral trustee structure before purchasing to ensure holders can 
understand and evaluate the arrangement.
    The OCC agrees that permitted payment stablecoin issuers may 
establish such collateral trustee arrangements. These arrangements may 
have the benefit of protecting payment stablecoin holders by providing 
a potential mechanism for administration of the reserve assets prior to 
bankruptcy or receivership. It is possible that such arrangements can 
facilitate redemptions more quickly than would occur in insolvency or 
bankruptcy. The OCC plans to continue to evaluate such arrangements to 
ensure they are serving their intended purpose of protecting payment 
stablecoin holders. To the extent it becomes clear that such 
arrangements add uncertainty or do not adequately protect payment 
stablecoin holders, the OCC will consider whether

[[Page 67021]]

such arrangements should continue to be permissible.
    To effectuate the use of collateral trustee arrangements, the OCC 
is adding a new Sec.  15.10(a)(9) clarifying that it is permissible for 
a permitted payment stablecoin issuer to establish a trust arrangement 
under applicable law for reserve assets, including the granting of a 
security interest in reserve assets, provided that: (i) any security 
interest in reserve assets granted to the trustee is for the sole 
benefit of payment stablecoin holders; (ii) the arrangement with the 
trustee does not impair the permitted payment stablecoin issuer's 
ability to timely redeem payment stablecoins in the normal course of 
business prior to default; (iii) the arrangement does not introduce 
claims that would compete with the claims of payment stablecoin holders 
of payment stablecoins issued by the permitted payment stablecoin 
issuer in the event of the insolvency of the permitted payment 
stablecoin issuer; and (iv) the arrangement with the trustee does not 
impair the ability of a receiver of the permitted payment stablecoin 
issuer to direct the prompt transfer or liquidation of the reserve 
assets in order to pay claims to payment stablecoin holders.\44\ These 
conditions are designed to ensure that such arrangements do not compete 
with the claims of payment stablecoin holders both prior to default as 
well as following default and that such arrangements are not used to 
grant security interests on behalf of parties that are not payment 
stablecoin holders. The OCC is considering whether to issue a separate 
rulemaking providing further clarity regarding this activity. As part 
of such a rulemaking, the OCC may consider including additional 
conditions, such as conditions to clarify the rights that the trust 
agreement must expressly provide to the receiver of, or bankruptcy 
trustee for, an insolvent permitted payment stablecoin issuer.
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    \44\ To the extent a permitted payment stablecoin issuer 
utilizes a collateral trustee arrangement but maintains ownership 
and control over the reserve assets, the OCC expects that the 
reserve assets would continue to be reflected on the issuer's 
balance sheet rather than on that of the collateral trustee.
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    With respect to the payment of the trustee in collateral trustee 
arrangements, it would be a violation of the condition in Sec.  
15.10(a)(9)(i) if the trustee were paid from the proceeds of the 
reserve asset collateral because the trustee holds a security interest 
in such collateral.
    The OCC declines to require a disclosure regime for collateral 
trustee arrangements at this time. Mandating a disclosure regime will 
not be effective at this point as the practice is nascent and the 
arrangements may vary extensively, such that mandatory disclosure may 
not capture the important aspects of such arrangements and could lead 
to customer confusion or a lack of relevant information. The OCC is 
also not requiring permitted payment stablecoin issuers to obtain 
express consent from payment stablecoin holders prior to entering into 
such arrangements. The OCC believes that the conditions set forth in 
Sec.  15.10(a)(9)(i) through (iii) are designed to protect payment 
stablecoin holders and obviate the need to require affirmative consent.
Fees Associated With Purchasing or Redeeming
    In addition to the activities outlined in section 4(a)(7) of the 
GENIUS Act (12 U.S.C. 5903(a)(7)), for the sake of clarification, 
proposed Sec.  15.10(a)(5) would have provided that permitted payment 
stablecoin issuers may assess fees that are associated with the 
purchasing or redeeming of payment stablecoins. This power is inherent 
in the activities described above and is explicitly recognized in 
section 4(a)(1)(B)(ii) of the Act (12 U.S.C. 5903(a)(1)(B)(ii)).
    One commenter recommended that the OCC confirm expressly that 
permitted payment stablecoin issuers may charge certain fees to 
generate revenue, including fees for minting and burning stablecoins 
and fees to collect a share of network transaction fees. The commenter 
recommended that the final rule permit alternate fee structures subject 
to supervisory review and that the final rule require disclosure of all 
fee structures.
    With respect to the commenter's suggestion about the inclusion of 
fees, the OCC does not believe further elucidation of this provision is 
necessary as it is intended to encompass a broad set of fees. The OCC 
addresses the assessment of fees in non-payment stablecoin digital 
assets in more detail below. To the extent an issuer has questions 
regarding whether a fee structure is permissible, it may reach out to 
the OCC. With respect to the commenter's concern regarding disclosure 
of fee arrangements, as discussed below, final Sec.  15.12(e)(1)(iv) 
requires disclosure of all fees associated with purchasing or redeeming 
payment stablecoins. Accordingly, the OCC is adopting Sec.  15.10(a)(5) 
as proposed, which allows permitted payment stablecoin issuers to 
assess fees associated with purchasing or redeeming payment 
stablecoins.
Acting as Principal or Agent With Respect to Payment Stablecoins
    The proposed rule, in Sec.  15.10(a)(6), also would have included 
the permitted activities outlined in section 16(b) of the GENIUS Act 
(12 U.S.C. 5915(b)), namely acting as principal or agent with respect 
to any payment stablecoin and paying fees to facilitate customer 
transactions.\45\
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    \45\ Section 16(b) of the Act provides in part that ``Entities 
regulated by the primary Federal payment stablecoin regulators are 
authorized to engage in the payment stablecoin activities and 
investments contemplated by this Act, including acting as a 
principal or agent with respect to any payment stablecoin and 
payment of fees to facilitate customer transactions.'' 12 U.S.C. 
5915(b). The activities authorized under section 16(b) include, for 
example, acting as an agent for a customer with respect to the 
redemption of a payment stablecoin issued by a third party.
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    Addressing proposed Sec.  15.10(a)(6), one commenter suggested 
distinguishing between principal and agent roles and then tying each to 
capital, liquidity, and operational risk controls. Several commenters 
also recommended that the OCC recognize activities in which permitted 
payment stablecoin issuers act as principal or agent with respect to 
payment stablecoins, either as separately enumerated activities under 
Sec.  15.10(a), which sets out generally which activities a permitted 
payment stablecoin issuer may engage in, or as examples of activities 
that directly support certain activities under proposed Sec.  
15.10(a)(8). Commenters cited activities such as limited, risk-
controlled principal activities supporting custody, settlement, 
payment, and liquidity functions; digital wallets and money 
transmission using payment stablecoins; facilitating customer 
purchases, sales, or redemptions of payment stablecoins; and holding 
payment stablecoins as principal to facilitate customer transactions. 
One commenter suggested addressing these examples in the preamble as 
published guidance. One commenter cautioned against adding prescriptive 
limits or conditions on principal or agency activities, arguing that 
the statute provides the relevant framework and that additional 
restrictions could narrow the flexibility that Congress intended. 
Another commenter noted that the OCC correctly does not view section 
16(b) as an open-ended grant of authority.
    With respect to the commenter who suggested distinguishing between 
principal and agent activities and tying each to capital, liquidity, 
and operational risk controls, the OCC notes that proposed Sec.  
15.10(a) serves a different function than the rule's risk

[[Page 67022]]

management requirements (final Sec.  15.13). Section 15.10(a) 
identifies the activities that are permissible for a permitted payment 
stablecoin issuer. By contrast, final Sec.  15.13 establishes risk 
management requirements designed to ensure that such issuers conduct 
permissible activities in a safe and sound manner. The commenter's 
suggestion therefore conflates two related but distinct inquiries: 
whether an activity is permissible for permitted payment stablecoin 
issuers; and whether and how the permitted payment stablecoin issuer 
may conduct the activity safely in accordance with the relevant risk 
management-related requirements.
    With respect to the commenter's suggestion for the provision of 
digital wallets and money transmission using payment stablecoins, 
without additional detail, the OCC cannot definitively say that such 
activities are permissible. Money transmission is a broad term even if 
limited to payment stablecoins. To the extent the specific activity 
qualifies as an activity under Sec.  15.10 (for example, the issuance 
or redemption of payment stablecoins), it is permissible. With respect 
to the provision of digital wallets, such an activity may be 
permissible but might also make the entity a custodian in certain 
circumstances depending on the scope of related services provided. 
Refer to the custody discussion below for more detail.
    The commenter's proposed activities relating to facilitating 
purchases or sales of payment stablecoins on customers' behalf and 
acting as a customer agent for redemption of a payment stablecoin 
issued by a third party seem to fit within the enumerated activity in 
Sec.  15.10(a)(6). Additionally, holding payment stablecoins as 
principal to facilitate customer transactions likely would also fall 
under Sec.  15.10(a)(6).
    With respect to the commenter that cautioned against adding 
prescriptive limits to Sec.  15.10(a)(6), the OCC is not including any 
express limits or conditions around the manner in which a permitted 
payment stablecoin issuer may act as principal or agent in the final 
rule. However, payment stablecoins are not a permitted reserve asset.
    One commenter recommended that the final rule confirm permitted 
payment stablecoin issuers may repurchase their stablecoins in 
secondary markets. The commenter explained that issuers may need to do 
so for several reasons, including stopping runs and managing the 
balance between circulating supply and holding additional reserve 
assets.
    Permitted payment stablecoin issuers may repurchase their 
stablecoins on secondary markets under proposed Sec.  15.10(a)(6). 
However, such transactions must not impair the ability of the permitted 
payment stablecoin issuer to satisfy its statutory redemption 
obligations or its ability to comply with the capital and liquidity 
requirements in the final rule. Additionally, any such transactions 
must otherwise comply with the Act, 12 CFR part 15, and other 
applicable law. The OCC is finalizing proposed Sec.  15.10(a)(6) 
without change.
Paying Fees To Facilitate Customer Transactions
    Consistent with section 16(b) of the GENIUS Act (12 U.S.C. 
5915(b)), proposed Sec.  15.10(a)(7) would have allowed permitted 
payment stablecoin issuers to pay fees to facilitate customer 
transactions (e.g., network or ``gas'' fees). If an issuer's payment 
stablecoin operates on a blockchain that assesses transaction fees, 
then the issuer may choose to pay transaction fees on behalf of the 
customer. The OCC recognized in the proposal that if an issuer is 
paying transaction fees on certain distributed ledgers, the issuer may 
have to hold non-payment stablecoin digital assets to facilitate the 
payment of these transaction fees.\46\ Similarly, the OCC recognized 
that the holding of non-payment stablecoin digital assets as principal 
necessary for testing a distributed ledger is a permissible activity.
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    \46\ See OCC Interpretive Letter 1186 (November 18, 2025).
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    Relatedly, the OCC solicited comment in the proposal about whether 
the final rule should explicitly include specific provisions addressing 
the permissibility of an issuer's holding of non-payment stablecoin 
digital assets to facilitate the payment of transaction fees.
    Several commenters responded that the OCC should explicitly 
recognize that it may be necessary for permitted payment stablecoin 
issuers to hold non-payment stablecoin digital assets where they are 
incidental to, and necessary for, the provision of payment stablecoin 
services and do not constitute a proprietary trading strategy. Other 
commenters similarly stated the OCC should allow permitted payment 
stablecoin issuers to hold limited amounts of non-payment stablecoin 
digital assets to pay network protocol fees or to conduct testing. On 
the other hand, one commenter stated that holding non-payment 
stablecoin digital assets for testing is potentially risky and 
speculative, and that permitted payment stablecoin issuers should have 
to seek prior written approval from the OCC.
    In response to the comments, the OCC is adding new Sec.  
15.10(a)(8), which provides that permitted payment stablecoin issuers 
may hold as principal non-payment stablecoin digital assets as 
necessary to pay fees, including customer fees and network fees, or to 
conduct necessary testing on distributed ledger-based platforms, 
subject to the conditions noted below. The OCC agrees with commenters 
that these activities should be expressly recognized because paying 
network fees may be necessary for permitted payment stablecoin issuers 
to operate and transact on certain blockchains and testing is 
appropriate to ensure that a permitted payment stablecoin issuer's 
systems are functioning as intended. As discussed in more detail below, 
the conditions the OCC is putting on holding such non-payment 
stablecoin digital assets obviates the need for a pre-approval process.
    The OCC also asked in the proposal whether the final rule should 
include limitations on the amount of non-payment stablecoin digital 
assets that an issuer may hold at any time.
    In response, several commenters stated that the final rule should 
not impose rigid limits on non-payment stablecoin digital asset 
holdings, with some citing potential future changes in technology and 
industry practices that may render rigid limits obsolete. Some 
commenters recommended instead that the OCC adopt a qualitative, 
principles-based supervisory approach based around clear internal 
controls, documentation, and risk management which ensures that non-
payment stablecoin digital asset holdings are not commingled with or 
treated as reserve assets. In contrast, one commenter responded that 
the OCC should provide more prescriptive and stringent limitations on 
the holding of non-payment stablecoin digital assets. The commenter 
recommended that those limits be expressed as both an absolute dollar 
cap and a percentage and should be subject to regular reporting and 
examination. One commenter also stated that the amount of non-payment 
stablecoin digital assets should be capped as necessary for reasonably 
foreseeable transactions, such as one week of transactions, based on 
the permitted payment stablecoin issuer's needs from the last 30 days.
    In final Sec.  15.10(a)(8), the OCC is requiring that principal 
holdings of non-payment stablecoin digital assets to pay fees shall not 
exceed quantities necessary for the reasonably foreseeable

[[Page 67023]]

conduct of such activities.\47\ The OCC declines to set a quantitative 
limit because the activities of permitted payment stablecoin issuers 
may vary, and a quantitative limit could be unnecessarily limiting. The 
OCC would expect that permitted payment stablecoin issuers would 
consider, among other things, historical data and expected network fees 
to determine how much non-payment stablecoin digital assets to hold in 
such a scenario. The OCC intends to evaluate over time whether this 
limit is appropriate. Final Sec.  15.13 provides the principles-based 
risk management principles that apply to permitted payment stablecoin 
issuers, and consistent with those principles and the reserve asset 
requirements in final Sec.  15.11, permitted payment stablecoin issuers 
will not be able to commingle or identify non-payment stablecoin 
digital assets or payment stablecoins as reserve assets.
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    \47\ The OCC has stated that, as an activity incidental to the 
business of banking, national banks may pay network fees on 
blockchain networks to facilitate otherwise permissible activities 
and hold, as principal, amounts of crypto-assets on balance sheet 
necessary to pay network fees for which the bank anticipates a 
reasonably foreseeable need. OCC Interpretive Letter 1186.
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    The OCC also solicited comment about whether the final rule should 
limit the payment methods a permitted payment stablecoin issuer may use 
to assess fees, including whether the permitted payment stablecoin 
issuer may assess fees in digital assets other than payment 
stablecoins.
    Several commenters responded that the final rule should not limit 
the methods of payment a permitted payment stablecoin issuer may accept 
when assessing fees. One such commenter responded that, if the OCC 
addresses non-fiat fee payments at all, it should be through a 
principles-based framework focused on transparency, risk management, 
and control discipline. Another commenter concurred and advocated a 
flexible, technology-neutral framework under which issuers are required 
to maintain transparent policies on fee assessment methods and disclose 
those methods to the OCC. Another commenter stated that the OCC should 
confirm in either the final rule or in subsequent guidance that a 
permitted payment stablecoin issuer must have appropriate procedures in 
place to ensure it can operate in a safe and sound manner if it accepts 
the payment of fees in the form of non-payment stablecoin digital 
assets.
    The OCC declines to limit the methods of payment a permitted 
payment stablecoin issuer may receive at this time, provided that any 
such payment complies with applicable laws. As the market evolves, the 
OCC may reconsider whether certain methods of payment should be 
impermissible.\48\ All permitted payment stablecoin issuers, including 
those that accept the payment of fees in the form of non-payment 
stablecoin digital assets, are subject to the risk management 
requirements set forth in Sec.  15.13. Additionally, the OCC would 
expect that all permitted payment stablecoin issuers operate in a safe 
and sound manner regardless of whether they accept payment of fees in 
the form of non-payment stablecoin digital assets.
---------------------------------------------------------------------------

    \48\ Any non-payment stablecoin digital asset received would not 
be a permissible reserve asset.
---------------------------------------------------------------------------

    The OCC notes that, after a permitted payment stablecoin issuer 
assesses fees in the form of non-payment stablecoin digital assets, the 
issuer may only hold the collected fees for the purposes outlined in 
final Sec.  15.10(a)(8), namely, to pay fees or to conduct necessary 
testing on distributed ledger-based platforms. To the extent a 
permitted payment stablecoin issuer holds non-payment stablecoin 
digital assets in excess of the amount necessary for the activities set 
forth in final Sec.  15.10(a)(8), the OCC would expect that the issuer 
divest of such assets as soon as practicable.\49\
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    \49\ The OCC would expect that most permitted payment stablecoin 
issuers should be able to divest of any such excess non-payment 
stablecoin digital assets within one business day. In recent 
conditional approvals for national banks, applicants have converted 
digital assets received to fiat currency within one business day or 
held such assets for another permissible purpose. See Conditional 
Approval 1366, Conditional Approval 1362, Conditional Approval 1353.
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Managing Foreign Exchange Risk
    Several commenters recommended that the OCC recognize that 
permitted payment stablecoin issuers that issue non-U.S. dollar-
denominated stablecoins may engage in foreign exchange risk management 
as a permitted activity. Some of those commenters characterized the 
permissible foreign exchange risk management activities as conditional 
upon or related to the issuance of non-U.S. dollar-denominated 
stablecoins, while one commenter recommended the OCC allow broader 
powers related to foreign exchange risk management if the final rule 
permits non-U.S. dollar-denominated stablecoins and narrower powers if 
the final rule does not permit non-U.S. dollar-denominated stablecoins. 
Several commenters distinguished these foreign exchange management 
activities from purely speculative trading activities, while two such 
commenters recommended explicit prohibitions on speculative activities 
and regulatory controls to discourage speculation.
    One commenter recommended against rigid supervisory rules or 
capital add-ons for foreign exchange risk in favor of expectations of 
safe and sound controls including board-approved risk appetites and 
independent risk oversight. One commenter recommended that foreign 
exchange risk management be understood as a tool to meet permitted 
payment stablecoin issuer reserve and redemption requirements, rather 
than insulating payment stablecoin holders from fundamental currency 
risk and recommended that any requirements imposed by the OCC focus on 
such reserve and redemption requirements rather than rigid limits or 
capital add-ons that constrain legitimate hedging activities.
    The OCC agrees with commenters that engaging in foreign exchange 
risk management should be a permissible activity. Specifically, the 
definition of payment stablecoin in section 2(22) of the Act (12 U.S.C. 
5901(22)) specifies that a payment stablecoin is a digital asset that 
the issuer ``is obligated to convert, redeem, or repurchase for a fixed 
amount of monetary value.'' Additionally, under section 2(17) of the 
Act (12 U.S.C. 5901(17)), ``monetary value'' means ``a national 
currency or deposit . . . denominated in a national currency.'' These 
provisions may reasonably be read to indicate that payment stablecoins 
are not necessarily limited to U.S. dollar-denominated stablecoins 
because it suggests that issuers may issue payment stablecoins backed 
by other types of national currencies. However, the list of permissible 
reserve assets that issuers may hold are generally U.S. dollar- or U.S. 
government-based reserve assets. Accordingly, to the extent that a 
permitted payment stablecoin issuer seeks to issue a non-U.S. dollar-
denominated payment stablecoin, it could incur substantial foreign 
exchange risk or else be limited to using a very narrow subset of 
reserve assets.
    Such foreign exchange risk would make it difficult for the issuer 
to ensure that it is able to meet the requirements of Sec.  15.11 and 
Sec.  15.13. The OCC therefore believes that managing foreign exchange 
risk is a permissible activity under managing reserves related to the 
issuance or redemption of payment stablecoins under Sec.  15.10(a)(3) 
and is permissible under final Sec.  15.10(a)(11) as an activity that 
directly supports the activities in Sec.  15.10(a)(1) through (a)(3).
    The OCC is providing in new Sec.  15.10(a)(10) of the final rule 
that permitted payment stablecoin issuers

[[Page 67024]]

may manage foreign exchange risk. However, permitted payment stablecoin 
issuers that manage foreign exchange risk are subject to the risk 
management requirements in Sec.  15.13(a)(10) of the final rule. Those 
requirements impose conditions on foreign exchange risk management such 
as requiring that a permitted payment stablecoin issuer must not use 
foreign exchange risk management as a means to speculate, including 
with respect to the appreciation or depreciation of any national 
currency.
Other Suggested Activities or Requests for Interpretations
    Separate from the specific activities enumerated in proposed Sec.  
15.10(a)(1) through (7), several commenters suggested additional 
activities that should be considered permissible activities. For 
example, one commenter recommended that the enumerated list include 
treasury management functions, including short-term investment-
optimization among permissible reserve assets subject to 
diversification and concentration limits. Another commenter recommended 
that the OCC recognize treasury management activities for reserve asset 
management within a non-exhaustive list of examples of activities that 
qualify under proposed Sec.  15.10(a)(8) as directly supporting core 
activities.
    At this time, the agency is not adding treasury management to the 
list of permissible activities enumerated in Sec.  15.10(a). The OCC 
notes that aspects of treasury management, including short-term 
investment optimization, are already included under Sec.  15.10(a)(3), 
which allows permitted payment stablecoin issuers to manage reserves 
related to the issuance or redemption of payment stablecoins. 
Additionally, with respect to treasury management functions that are 
not encompassed by that provision, such functions may qualify under 
final Sec.  15.10(a)(11) as activities that directly support the 
activities in Sec.  15.10(a)(1) through (a)(4).
    The OCC declines to specifically add ``treasury management'' to the 
enumerated list of activities because that term is not clearly defined 
and could be read broadly, and therefore, the OCC would need to 
evaluate the specific treasury management functions a permitted payment 
stablecoin issuer proposes to engage in to determine whether they are 
permissible under the final rule. For example, treasury management 
activities conducted to ensure liquidity to meet payroll demands and to 
pay business expenses incurred as a result of conducting payment 
stablecoin activities directly support core permitted payment 
stablecoin issuer activities and are permissible. The OCC invites 
permitted payment stablecoin issuers to seek clarification from the OCC 
as to whether a particular activity is permissible.
    One commenter recommended that the OCC add to the enumerated 
permissible activities list customer onboarding, identity verification 
and compliance functions reasonably necessary to support permitted 
payment stablecoin issuer operations. Another commenter recommended 
that the OCC recognize onboarding processes as an item in a non-
exhaustive list of examples of activities that qualify under Sec.  
15.10 as directly supporting core activities.
    The agency declines to include customer onboarding, identity 
verification, and compliance functions in the list of permissible 
activities enumerated in Sec.  15.10(a) at this time. As explained 
below, Sec.  15.12 provides that a permitted payment stablecoin 
issuer's obligation to redeem does not begin until, among other things, 
the customer has been successfully onboarded. Accordingly, because the 
OCC addresses onboarding in Sec.  15.12 of the final rule, the OCC does 
not believe it needs to specifically include onboarding as an 
enumerated activity. Permitted payment stablecoin issuers may onboard 
customers, so long as the onboarding complies with the Act, 12 CFR part 
15, and other applicable laws, including AML/CFT laws and regulations 
and economic sanctions obligations.
    Several commenters recommended the OCC add various specific 
interpretations to the final rule. One commenter recommended that the 
OCC clarify whether non-hosted or external wallets are permissible for 
a permitted payment stablecoin issuer and to set clear boundaries to 
keep payment control within regulated entities. Another commenter 
recommended that the OCC prohibit regulated entities from hosting or 
transacting with self-custody wallets due to money laundering 
concerns.\50\
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    \50\ As discussed below, self-custody generally refers to 
holding one's own assets directly even though technically no custody 
service is provided in such an arrangement.
---------------------------------------------------------------------------

    The Act does not specifically prohibit self-custody or non-hosted 
wallets. The OCC declines to explicitly prohibit the use of such 
wallets by permitted payment stablecoin issuers but notes that the use 
of such wallets must comply with the requirements of the Act, 12 CFR 
part 15, and other applicable laws. For example, permitted payment 
stablecoin issuers that use such wallets still must comply with section 
4(a)(6) of the Act (12 U.S.C. 5903(a)(6)), which provides that a 
permitted payment stablecoin issuer may issue payment stablecoins only 
if the issuer has the technological capability to comply, and will 
comply, with the terms of any lawful order. Additionally, permitted 
payment stablecoin issuers must comply with all applicable AML/CFT laws 
and regulations and economic sanctions obligations.
    One commenter recommended that the OCC require permitted payment 
stablecoin issuers to use a formally defined wallet credential state 
machine describing the statu

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