Community banks should consider seeking approval to issue payment stablecoins under the GENIUS Act, on their own or through a subsidiary where that route applies, the Office of the Comptroller of the Currency (OCC) said on Oct. 26. The agency said in a post on X that it wants those banks to “help shape the future of payments” and linked the push to its Community Bank Comeback initiatives.
Banks can’t file yet. The OCC’s GENIUS Act page says the agency is not accepting applications or waiver requests, and will start only once the Office of Management and Budget gives final approval to the information collection behind its application forms. A press release will mark the opening.
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Answering Community Bank Concerns
The OCC’s community bank fact sheet, released alongside its Oct. 21 final rule, lists eight concerns about stablecoins and gives its answer to each. On deposit flight, the agency said bank deposits can count as reserve assets backing payment stablecoins, and that “the effect of stablecoin adoption on community bank deposits remains uncertain, and estimates vary widely.”
On yield, the fact sheet notes that the OCC’s final rule dropped a proposed rebuttable presumption for deals that would break the GENIUS Act’s ban on issuers paying interest or yield, instead restating the statutory language. The OCC said it will watch for compliance, including when it reviews applications.
On competition, the regulator pointed to exams scaled by size. Large issuers get a full-scope exam every 12 months, while certain small issuers qualify for an 18-to-24-month cycle.
Deadline and Waivers
Issuers must comply with the GENIUS Act starting Jan. 18, 2027, and issuing a payment stablecoin without approval after that date carries criminal penalties, according to OCC Bulletin 2026-51, dated Oct. 21. The OCC said it generally expects to grant waivers to issuers already operating in the U.S. that have a substantially complete application pending, and said it sees no general reason to grant them to prospective issuers that aren’t yet operating. The bulletin adds that the agency can grant a waiver to a bank’s stablecoin subsidiary, but not to an insured bank that issues directly.
Once an application arrives, the OCC said, it will decide within 30 days whether it is substantially complete, then act within 120 days of that determination.
The outreach follows a lawsuit the Independent Community Bankers of America, a community bank trade group, filed against the OCC on Oct. 2 over national trust charters granted to crypto firms. Congress did not create that charter as a “side door into the banking system for crypto firms” seeking a federal charter’s credibility without the obligations insured banks carry, ICBA CEO Rebeca Romero Rainey said in a statement on the suit.
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