OCC Urges Community Banks to Become Payment Stablecoin Issuers

The US Office of the Comptroller of the Currency is encouraging community banks to enter the payment stablecoin market. In a Monday post on X, the OCC said it was supporting the development of payment stablecoin capabilities within the community banking sector and invited interested institutions to apply to become permitted issuers.

The announcement followed the regulator finalizing rules under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The law is scheduled to take effect in January, establishing a federal framework for payment stablecoin issuers. Banks may apply directly or through a subsidiary to obtain the necessary authorization.

The OCC’s outreach comes amid objections from banking groups to proposed rules governing stablecoin yield. Some advocates argue that allowing issuers to pay interest could conflict with the congressional intent behind GENIUS and give crypto companies and other financial institutions an unfair advantage.

Community banks are already challenging the OCC’s treatment of crypto firms. Earlier this month, the Independent Community Bankers of America filed a lawsuit alleging that crypto companies benefited from lighter regulatory requirements than community banks. Wider participation by banks could increase competition in the stablecoin market while intensifying the debate over how payment stablecoins should be regulated.