US finalises stablecoin rule, cuts reserve liquidity floor amid bank lending warnings

OCC rule alongside GENIUS Act sets standards for payment stablecoin issuers; banks warn of deposit flight

By LineZotpaper

Published22 October 2026

Read Time2 min

The US Office of the Comptroller of the Currency (OCC) has released its final stablecoin rule, cutting the minimum immediately available liquidity from 10% to 5% of reserves and dropping a proposed insured-deposit requirement, drawing praise from Treasury Secretary Scott Bessent and criticism from the American Bankers Association (ABA), which warned the rule could weaken bank lending.

The 721-page rule, issued on 21 October alongside the GENIUS Act, standardises the regulation of payment stablecoin issuers. Treasury Secretary Scott Bessent compared the law to the National Currency Act of 1863, calling it a cornerstone of America's position as the global crypto capital. The OCC kept the ban on issuers paying interest or yield on stablecoins but dropped a proposed rebuttable presumption aimed at rewards routed through affiliates, opting for case-by-case review. The ABA objected, saying the rule gives indirect stablecoin rewards room and invites deposit flight that would weaken lending. "Attempting to address deposit flight and economic harm after it has occurred is the wrong approach," the ABA said.

Reserve changes include cutting the immediate liquidity floor from 10% to 5% of reserves, removing a proposed 0.5% insured-deposit allocation capped at $500 million for large issuers, and eliminating a daily liquidity concentration cap. Full backing remains required. For a hypothetical $100 billion stablecoin issuer, the immediate liquidity minimum falls from $10 billion to $5 billion, and the insured-deposit requirement falls to zero. The OCC said spreading insured deposits across many institutions adds operational complexity and counterparty exposure, and noted that high-quality assets like Treasury securities can be sold quickly.

A Federal Reserve study found that banks servicing stablecoin issuers saw interbank payment activity rise 67% and reserve balances rise about $1.5 billion, but their loan share ran 14 percentage points below comparable banks. The White House Council of Economic Advisers estimated that a yield ban could raise bank lending by $2.1 billion in a baseline scenario, though the effects could be larger under extreme assumptions.

The rule takes effect 18 January 2027, alongside the GENIUS Act. Global stablecoin supply stood at $301 billion on 21 October.

Analysis

Why This Matters

The rule determines where hundreds of billions in stablecoin reserves sit, potentially shifting deposits away from community banks and into securities or concentrated banking partners.
The ABA warns that reduced lending capacity could affect businesses and consumers who rely on bank credit.
The January 2027 implementation date means market participants have roughly three months to adjust to the new framework.

Background

The GENIUS Act and the OCC rule represent the first comprehensive federal framework for payment stablecoins in the US. The Treasury has positioned stablecoin regulation as essential to maintaining dollar dominance and fostering innovation. The ABA has consistently warned that unconstrained stablecoin growth could erode bank deposits, the traditional source of loan funding. Previous proposals included stricter insured-deposit allocations and higher liquidity buffers.

Key Perspectives

Treasury and OCC: The rule standardises stablecoin issuance, ensures full reserve backing, and promotes innovation while maintaining safety and soundness. Bessent described it as a cornerstone of US crypto leadership. American Bankers Association: The rule creates an uneven playing field, allowing indirect rewards that could pull deposits from banks and reduce lending capacity. The case-by-case approach to rewards is insufficient. Federal Reserve and CEA: Studies show mixed effects. Banks with stablecoin business saw higher payment activity but lower loan shares. The CEA model suggests yield bans boost lending modestly.

What to Watch

Issuer reserve reports and bank custodian concentration after January 2027.
Whether community banks lose low-cost deposits and adjust lending.
The outcome of separate anti-money-laundering rulemaking.

Sources

US quietly eases stablecoin reserve rules as banks warn billions could shift away from lending · CryptoSlate

Checked

12 claims in this story checked against 1 source: 9 supported.

Show each claim

SupportedThe OCC finalised a stablecoin rule that cuts the minimum immediately available liquidity from 10% to 5% of reserves.CryptoSlate: “The OCC cut the minimum immediately available liquidity from 10% of reserves to 5%.”
SupportedThe ABA warned that the rule could invite deposit flight and weaken bank lending.CryptoSlate: “The American Bankers Association (ABA) responded the same day, saying the final rule gives indirect stablecoin rewards room and invites deposit flight that would weaken bank lending.”
Partly supportedThe rule drew praise from Treasury Secretary Scott Bessent.CryptoSlate: “He called the law a cornerstone of America's position as the world's crypto capital.”
Partly supportedThe OCC issued the rule on 21 October alongside the GENIUS Act.CryptoSlate: “The rule takes effect Jan. 18, 2027, alongside the GENIUS Act”
SupportedThe ABA said, “Attempting to address deposit flight and economic harm after it has occurred is the wrong approach.”CryptoSlate: “the ABA said: “Attempting to address deposit flight and economic harm after it has occurred is the wrong approach.””
SupportedBessent compared the GENIUS Act to the National Currency Act of 1863 and called it a cornerstone of America’s position as the global crypto capital.CryptoSlate: “Treasury Secretary Scott Bessent compared the GENIUS Act to the National Currency Act of 1863 on Oct. 21, the day the Office of the Comptroller of the Currency (OCC) released its 721-page stablecoin final rule. He called the law a cornerstone of America's position as the world's crypto capital.”
Partly supportedThe OCC dropped a proposed 0.5% insured-deposit allocation capped at $500 million for large issuers.CryptoSlate: “It dropped a proposed insured-deposit allocation of 0.5% of reserves, capped at $500 million, for issuers with at least $25 billion outstanding.”
SupportedFor a hypothetical $100 billion issuer, the immediate-liquidity minimum falls from $10 billion to $5 billion and the insured-deposit requirement falls to zero.CryptoSlate: “A hypothetical issuer with $100 billion of stablecoins shows the scale. The immediate-liquidity floor falls from $10 billion to $5 billion, and the separate $500 million insured-deposit requirement falls to zero.”
SupportedA Federal Reserve study found interbank payment activity at banks servicing stablecoin issuers rose 67%.CryptoSlate: “Their interbank payment activity rose 67% over nine months”
SupportedThe study found those banks’ loan share was 14 percentage points below that of comparable banks.CryptoSlate: “their loan share of assets ran 14 percentage points below that of comparable banks.”
SupportedThe CEA estimated a yield ban could raise bank lending by $2.1 billion in its baseline scenario, with larger effects under extreme assumptions.CryptoSlate: “The White House Council of Economic Advisers’ (CEA) September model estimates that an effective yield ban would raise bank lending by $2.1 billion in the baseline , about 0.02% of loans, and by $531 billion under stacked extreme assumptions.”
SupportedThe rule takes effect on 18 January 2027.CryptoSlate: “The rule takes effect Jan. 18, 2027, alongside the GENIUS Act”