US quietly eases stablecoin reserve rules as banks warn billions could shift away from lending
The OCC issued its 721-page final rule implementing the GENIUS Act, effective Jan. 18, 2027. It keeps the ban on stablecoin issuers paying interest but drops a proposed presumption against rewards routed through affiliates, leaving such programs for case-by-case review. The rule also lowers required immediately available liquidity from 10% to 5% of reserves, removes a specific insured-deposit allocation and declines to require community-bank deposits, while retaining full reserve backing and a 40% counterparty cap. The American Bankers Association argues the approach could encourage deposit flight and weaken lending. The OCC says liquid assets can be sold quickly and diversified insured deposits pose operational risks. Studies cited show stablecoin activity can bring payment flows and reserves to banks, but may coincide with lower loan shares and more volatile reserves. The effects on bank funding and lending will depend on how issuers allocate reserves.
