OCC invites community banks to become stablecoin issuers

The Office of the Comptroller of the Currency (OCC) on Monday urged community banks to enter the stablecoin market, inviting them to apply directly or through subsidiaries to become permitted payment stablecoin issuers under the GENIUS Act. The regulator said it wants smaller lenders to help shape the future of payments, CoinDesk reports.

What the OCC said

• The invitation is pitched as part of the OCC's "Community Bank Comeback" push to tailor regulation and supervision so smaller banks can grow and compete.
• Banks can apply directly or via a subsidiary. The OCC, an independent bureau of the Treasury that charters and supervises national banks and federal savings associations, would be the federal regulator for those issuers.
• Applications are not open yet. The OCC says the process starts once the required federal paperwork approval is complete, and new issuers generally need approval before launching in the US, The Defiant notes.

The dates that matter

In a separate bulletin on Oct. 21, the OCC said issuers must comply with its newly finalised GENIUS Act rules from Jan. 18, 2027, when federal approval requirements kick in. Existing issuers that file substantially complete applications by then can ask for temporary waivers to keep operating during review, and the OCC says it generally expects to grant them where appropriate. Our explainer on what the GENIUS Act is covers the law's reserve and redemption rules.

Why it matters

Bank lobby groups have pushed Congress to restrict yield on stablecoins, worried that interest-paying tokens could pull deposits out of banks. The OCC's message is the opposite tack: rather than leaving stablecoin payments to big banks and crypto firms, it wants community banks to compete in the market themselves.

The relationship is not friction-free. The Independent Community Bankers of America (ICBA) has sued the OCC, arguing it exceeded its authority by granting national trust-bank charters to crypto firms, and Senator Elizabeth Warren has asked the agency to justify chartering nine crypto-focused institutions. An OCC spokesperson told CoinDesk those trust banks run different business models from typical community banks.