Type note: This article is a B-type "pre-reading explainer." Its main goal is to answer the institutional question of "who supervises non-bank companies issuing stablecoins." This is a topic that requires understanding the regulatory framework before making judgments.
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You might think that stablecoin issuers like Circle and Tether, which are non-bank institutions, should face lighter supervision than banks because they do not take deposits.
But the reality is different: the GENIUS Act creates a dedicated federal regulatory pathway for non-bank companies issuing stablecoins. Day-to-day supervision is handled by the U.S. Office of the Comptroller of the Currency (OCC), and it applies to non-bank entities and foreign issuers.
Start with the regulatory framework: who handles what
The GENIUS Act, effective July 18, 2025, establishes a federal regulatory framework for payment stablecoins. Under the Act, the OCC has supervisory or enforcement authority over the following types of stablecoin issuers:
National banks or their subsidiaries
Federal savings associations or their subsidiaries
Federal branches and their subsidiaries
Non-bank entities that seek or have obtained approval to become a "federally qualified payment stablecoin issuer" (PPSI)
Foreign payment stablecoin issuers
State-qualified payment stablecoin issuers subject to OCC supervision or enforcement authority
The key point is: non-bank companies and foreign issuers that want to issue stablecoins can apply directly to the OCC for a federal license and obtain PPSI status. The OCC's proposed rule explicitly covers "non-bank entities, such as fintech companies, seeking to issue payment stablecoins through a federally licensed PPSI status."
Two pathways: federal channel vs state channel
The GENIUS Act creates three pathways to become a qualified issuer:
Federal bank pathway: insured depository institutions issue through subsidiaries, with approval by their primary federal regulator (OCC, Federal Reserve, or FDIC)
Federal non-bank pathway: non-bank entities, uninsured national banks, and federal branches of foreign banks are approved by the OCC to become PPSIs
State pathway: entities established under state law are approved by state stablecoin regulatory authorities — but if issuance exceeds $10 billion, they must transition to the federal regulatory framework within one year
The OCC released a 376-page proposed rule in February 2026 covering a full regulatory framework for stablecoin issuers, from capital reserves and redemption mechanisms to operational reporting, and opened a 60-day public comment period. OCC Acting Comptroller Gould said on August 19, 2026, that the final rule would be published before November, with issuer applications expected to be accepted starting in 2027.
What non-bank issuers need to comply with
The OCC's proposed rule sets a series of operational standards for PPSIs:
| Requirement | Specific content |
|---|---|
| 1:1 reserve | The fair value of reserve assets must be at least equal to the amount of stablecoins in circulation |
| Eligible reserve assets | Cash, demand deposits, U.S. Treasury securities maturing within 93 days, overnight repurchase agreements, etc. |
| Timely redemption | Redemption generally must be completed within two business days; if single-day redemptions exceed 10% of circulating supply, it may be extended to 7 calendar days |
| Minimum capital | The OCC proposal sets a $5 million minimum capital threshold for new issuers |
| Monthly reserve report | Monthly publication of reserve composition, reviewed by a certified public accounting firm, with CEO/CFO signature certification |
| Yield prohibition | Payment of interest or yield to holders is prohibited; passing yield through affiliated parties will be presumed to be a violation |
Risk reminder: For non-bank issuers, one issue to watch is that the OCC is studying whether to prohibit a single PPSI from issuing multiple brands of stablecoins — including through white-label partnerships or co-branded products. If this rule is implemented, it could affect the business models of issuers like Tether and Circle.
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How should you think about this?
[What to do]: Understand which regulatory pathway the issuer of the stablecoin you hold has used to obtain approval.
[How to do it]:
Visit the issuer's official website and check whether it discloses approval status from the OCC or a state regulator
Circle received final OCC approval in July 2026 and is a federally regulated issuer
Tether, as a foreign issuer, could theoretically apply for foreign PPSI status — but this would require the U.S. Treasury Department to determine that its home country's regulatory system is "comparable" to the GENIUS Act. As of mid-2026, no such determination has taken effect
[Completion standard]: You can clearly explain whether the stablecoin issuer you hold has already received clear approval from a U.S. federal regulator, or which approval pathway it is currently pursuing.
How to verify completion: Visit the "Regulatory" or "Compliance" page on Circle's or Tether's website and check whether it discloses approval status from the OCC or a state regulator. Circle has clearly received OCC approval. Tether has not yet obtained clear federal licensing from a U.S. federal regulator.
Next step: If you hold USDT and trade on U.S. platforms, you may want to watch whether Tether will apply for OCC PPSI status, or whether it will adjust its strategy before July 18, 2028 — the deadline after which U.S. platforms may no longer offer unlicensed stablecoins to users. Understanding possible platform conversion options in advance can help you avoid being caught off guard.
