The Office of the Comptroller of the Currency (OCC) has launched a comprehensive draft proposal aimed at regulating the United States’ stablecoin industry. This move, seen as a crucial milestone, seeks to establish a federal oversight system specifically for stablecoins used in payments throughout the nation.
What Does the New Draft Regulation Encompass?
The OCC has structured this framework to target stablecoin issuers based in the United States, as well as select foreign entities operating on US soil. The draft outlines technical mandates covering operational aspects of issuers and the management of reserve assets. It also sets clear regulations for digital asset custodial activities conducted by entities under the OCC’s jurisdiction.
How are Officials and the Industry Reacting?
Jonathan V. Gould, Acting Comptroller at the OCC, asserted the initiative aims to foster the stablecoin industry’s stable and secure evolution. Stakeholders have 60 days to review and comment on the draft before any final adoption. Many industry experts have welcomed the proposal, hoping it will dispel the long-standing uncertainties surrounding the stablecoin market.
Jonathan V. Gould remarked that the framework “lays the groundwork for safe and sound development of the stablecoin sector” while emphasizing the importance of public input before finalization.
Inspired by legislative standards such as the GENIUS Act, the proposal delineates specific requirements for stablecoin issuance, including baseline standards, reserve management, robustness of operations, and compulsory regulatory supervision.
An additional set of directives will be formed, particularly around the Bank Secrecy Act and anti-money laundering strategies, in collaboration with the US Department of the Treasury. This phased rollout reflects a careful integration of stablecoins into the banking framework.
The proposal mandates that stablecoin issuers honor user redemption demands within a maximum of two business days. Issuers must also keep reserves in secure, allowable forms, such as government securities and money market funds, thereby aiming to legitimize stablecoins as viable payment tools in the US economy.
Despite these strides, the American Bankers Association has petitioned for a halt on OCC endorsements for new banks pivoting on cryptocurrency or stablecoin models. They argue the regulatory landscape remains unsettled and advise cautious advancement.
