Most coverage of the US stablecoin rule will lead with the yield ban. The more interesting story is in the plumbing. When the Office of the Comptroller of the Currency (OCC) finalised its GENIUS Act rule on 21 October 2026, it kept the headline promises (1:1 backing, fast redemption, no interest for holding) but loosened several of the liquidity buffers it had proposed in February. We lined the two versions up side by side.
Proposal vs final rule
| Requirement | February 2026 proposal | Final rule (21 Oct 2026) |
|---|---|---|
| Reserve backing | 1:1, segregated | 1:1, segregated (unchanged) |
| Minimum daily liquidity | 10% of reserves | 5% of reserves |
| Weekly liquidity test | 30% floated | Dropped |
| Weighted average maturity cap | 20 days | Dropped |
| Redemption deadline | Two business days, automatic seven-day extension for large waves | Two business days; no automatic extension, issuer must notify OCC within 24 hours if requests exceed 10% of outstanding value and may ask for more time |
| Yield for holding | Banned, plus a rebuttable presumption on affiliate and third-party payments | Banned; presumption removed, case-by-case review instead |
| Capital | Minimum floor | $5 million floor, plus an operational backstop of about 12 months of expenses |
Sources: Sheppard Mullin’s summary, Ledger Insights and the OCC bulletin.
Our math: what a 5% buffer covers
Take a hypothetical issuer with $1 billion of coins outstanding. Under the proposal it would have needed $100 million available same-day. Under the final rule it needs $50 million.
Now apply the new notification trigger. Redemptions above 10% of outstanding value, $100 million in our example, force a report to the OCC within 24 hours. So the mandatory same-day cash covers only half of the redemption wave that the rule itself treats as unusual. The rest has to come from selling or repo-ing Treasuries. As Ledger Insights notes, an issuer could in theory hold 5% in daily liquidity and the balance in Treasuries out to 93 days.
That is not automatically dangerous. Short Treasuries are among the most liquid assets in the world. But it does mean the safety case leans on markets staying open and orderly during a run, rather than on cash sitting idle.
The calendar matters too. The rule’s “business day” excludes Saturdays, Sundays and federal holidays, so a redemption request filed on a Friday can lawfully be paid on Tuesday. Crypto trades 24/7; dollar redemptions do not.
The yield ban got softer at the edges
The statute’s ban on paying holders interest “solely” for holding a stablecoin stays. What changed is enforcement. The proposal presumed that certain payments through affiliates or partners were disguised yield unless proven otherwise. The final rule drops that presumption, and the OCC’s fact sheet says it will instead police evasion case by case. Expect exchanges and wallets to keep testing “rewards” programmes.
Timeline
- 18 July 2025: GENIUS Act signed into law.
- February 2026: OCC proposal published; comments taken until 1 May (late ones until 1 July).
- 21 October 2026: Final rule issued. AML and sanctions rules are still to come in a separate rulemaking with the Treasury.
- 18 January 2027: Rule and Act take effect, 87 days from today. Issuers with a substantially complete application pending can ask for a waiver of up to 12 months, per OCC Bulletin 2026-51.
What it means for Indian investors
Directly, very little. The rule governs issuers selling stablecoins into the US. Indian users who hold USDT or USDC on an FIU-IND-registered exchange keep the same access and the same tax treatment: stablecoins are virtual digital assets, so gains are taxed at 30% plus cess and transfers attract 1% TDS. Our France stablecoin tax piece walks through why a crypto-to-stablecoin swap is a taxable event, and the BtcMedia tools show the net-in-hand effect.
Indirectly, a stricter US regime could make dollar stablecoins look safer and more bank-like to global users, which matters for anyone parking money in USDC between trades. Just remember that the two-day redemption right belongs to the issuer’s direct customers, not to retail users on Indian exchanges, who exit by selling for rupees.
BtcMedia verdict
A workable, industry-friendly rule. The 1:1 backing and the yield ban hold, but the cash buffers are thinner than first proposed. That is a fair trade in calm markets and the part to watch in a stressed one.
FAQ
When does the OCC’s stablecoin rule take effect? On 18 January 2027, the same day the GENIUS Act’s main provisions start.
Can US stablecoin issuers pay interest? No. Issuers cannot pay interest or yield solely for holding, using or retaining a payment stablecoin. Third-party rewards will be reviewed case by case.
Does this change crypto tax in India? No. Stablecoins remain virtual digital assets in India, taxed at 30% plus cess with 1% TDS on transfers.
This article is for information only and is not financial advice.