OCC Final Stablecoin Rule Drops Automatic Seven-Day Redemption Extension

The Office of the Comptroller of the Currency has finalized its GENIUS Act rule for payment stablecoin issuers under its jurisdiction, dropping a proposed automatic seven-calendar-day redemption extension during heavy withdrawal demand. The final framework takes effect January 18, 2027.

The OCC announced the rule on October 21, and the Federal Register published the final text on October 23. The framework retains full reserve backing and a general two-business-day redemption limit, while making any extension during a qualifying surge subject to OCC discretion.

A redemption surge no longer brings an automatic extension

A permitted issuer receiving redemption requests above 10% of the outstanding issuance value of any brand in a single 24-hour period must notify the OCC through its supervisory office within 24 hours. The issuer may request more time, but the OCC can grant or deny that request or impose limits.

That replaces the proposal’s automatic seven-calendar-day extension. The OCC said it agreed with concerns that an automatic extension could be pro-cyclical and trigger or worsen runs, and expects extensions to be rare. That is the agency’s rationale for the change; the rule itself does not establish how holders or issuers will behave during a future run.

The routine deadline also needs qualification. Redemption generally must be completed no later than two business days following the requested redemption, after the issuer receives the order and necessary conditions, such as onboarding, are satisfied. For an outgoing payment, completion means the issuer has fully processed and initiated the transfer. It does not necessarily mean the receiving bank has posted the payment or the customer has received it. A requested credit to the customer’s account with the issuer is also permitted.

Full backing remains, with a defined shortfall process

The framework requires reserve assets to fully back outstanding payment stablecoins at all times. The OCC says it added flexibility while retaining core liquidity, diversification and concentration requirements. The rule also requires monthly reserve-composition reporting, examination by a registered public accounting firm, and CEO and CFO certification of accuracy.

If reserve value falls below the minimum on any day, the issuer must notify the OCC and stop new issuance, apart from bridge transfers that do not increase net outstanding supply. After 15 consecutive business days below the minimum, the issuer must begin reserve liquidation and redemption, unless the OCC extends that period in its sole discretion. Redemption fees cannot be charged during liquidation.

Required holder disclosures include that payment stablecoins are not legal tender, are not issued, guaranteed or approved by the United States, are not deposits, and are not insured by the U.S. government, FDIC or NCUA. Full reserve backing should therefore not be read as government insurance.

January implementation and separate compliance work

The OCC’s final-rule bulletin describes a framework for covered payment stablecoin issuance and certain related custody activity. Its reach is limited to the defined statutory and OCC scope; it does not apply to every stablecoin or issuer. The effective date comes after both the announcement and Federal Register publication.

Application intake is a separate step. As of October 24 at 02:21 UTC, the OCC’s GENIUS Act page said the agency was not yet accepting applications or waivers. Its application guidance says intake will begin after final Office of Management and Budget approval of the forms’ information collection, with an announcement to follow. A substantially complete application by January 18 can support a waiver request, but does not guarantee a waiver or approval.

Bank Secrecy Act, anti-money-laundering and OFAC sanctions requirements are being addressed in a separate rulemaking. Adoption of this framework does not prove any issuer’s readiness, approval or current compliance. The next checks are the opening of application intake, the separate compliance rulemaking and any further OCC implementation guidance.

Generic editorial illustration of bank staff reviewing liquidity and redemption policy folders; not an actual OCC event. Editorial illustration: CRYPTO MAIN NEWS / OpenAI.