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New federal frameworks are reshaping US supervisory rules, and banks, nonbanks and fintechs will all need to recalibrate their strategies for a landscape focused more on activity than identity.
In February 2026, the Office of the Comptroller of the Currency (OCC) proposed a framework aligned with the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), clarifying new federal standards for firms issuing stablecoins. The framework introduces permitted payment stablecoin issuers (PPSIs) as the federal pathway for issuing stablecoins at scale in the U.S.
The OCC proposal sets standards: 1:1 reserve backing, restricted eligible assets, segregation and custody protocols, a ban on reusing reserve assets, monthly attestations, capital and concentration limits, and a federal charter path for nonbanks.
Two features of the framework matter most for the broader supervisory landscape:
- State-qualified issuers can operate nationally only if they stay below $10bn in outstanding stablecoins; above that, they must move to federal OCC oversight within 360 days or stop issuing.
- For federally qualified issuers, the framework contemplates preemption of certain state licensing requirements, including money transmitter laws.
Nonbanks would now be able to issue stablecoins nationwide under a federal framework, without a bank charter or state licenses. This changes the competitive landscape; nonbanks may offer payments nationwide without the costs banks incur.
The OCC proposal is the first detailed example of how prudential standards may apply to both banks and nonbanks. With the public consultation on the proposal having just closed, final rules could be expected within the next six to 12 months, depending on the volume and complexity of comments received.
The bigger picture
The OCC proposal is one of the first federal prudential supervisory regimes specifically designed for nonbank payment and stablecoin activity outside the bank charter and state money transmitter systems, a significant change drawing interest from policymakers across the payments space.
In April 2026, the Payments Access and Consumer Efficiency Act (PACE Act) was introduced by Representatives Young Kim (R-CA) and Sam Liccardo (D-CA). It proposes an optional OCC registration for nonbank payment providers holding 40+ state licenses. These firms would need to have 1:1 reserves and meet capital and risk standards, but would gain direct access to Fed payment systems.
This structure closely follows the GENIUS Act, but for a different type of entity. GENIUS allows stablecoin issuers to come under federal supervision without a bank charter. PACE would extend a similar option to nonbank payment providers, but it remains at a very early stage and is likely years away from being signed into law or implemented. Firms should not expect any immediate changes from PACE at this point.
However, it is still important to note if passed it would mean, GENIUS preempts state money transmitter laws for federal-qualified issuers, and PACE would allow payment providers to exit the 50-state licensing system they have relied on for years.
Most large nonbank payment companies operate under many state licenses, each with different requirements and no unified federal standard. The PACE Act would address this, but the GENIUS Act already creates a federal framework. Extending it to other nonbank payments is now a practical policy question.
Regulators are shifting their focus from an institution’s charter to its actual business activities. Under the GENIUS Act and the OCC’s proposal, any firm that holds customer funds, promises redemption, or processes payments will fall under federal oversight, regardless of whether it’s a bank.
With these new standards, the line between banks and nonbanks is blurring, making regulatory adaptability essential.
Why you should care
For banks, this is a fundamental market shift. As federal regulation of stablecoins advances, PPSIs could operate nationally under a federal supervisory framework rather than a patchwork of state licenses or without a bank charter.
Banks will now face direct competition from fintechs and payment firms that can quickly scale. The GENIUS Act and proposed PACE Act would allow nonbanks to access OCC oversight and, potentially, Federal Reserve payment rails. National scope under federal supervision is now separate from deposit insurance and charter status.
Stablecoins are shifting funding flows. Issuers must hold reserves in cash, Treasuries, or demand deposits at insured banks, moving funds away from traditional deposits and increasing competition. Large or volatile stablecoin balances can disrupt funding sources and liquidity, challenging current balance sheet strategies.
Supervisory expectations will now extend beyond banks to their nonbank partners. New standards such as monthly reserve attestation, board-level governance, concentration limits, capital requirements, and restrictions on reusing pledged collateral will set the baseline for both new entrants and the fintech partnerships banks support.
Examiners are unlikely to accept weaker standards for partners than for primary issuers. This shift will shape how third-party risk management, reserve oversight, and program governance are structured going forward.
For nonbanks, federal stablecoin regulation offers a path to scale on a national level. Firms can operate as state-qualified issuers if stablecoin issuance stays below $10bn. Once above that threshold, they switch from handling multiple local regimes to a single federal regulator under OCC oversight, which preempts state rules. However, this comes with the expectation of higher prudential standards for governance, compliance, and risk management
If the PACE Act passes, large nonbank payment firms could register with the OCC and access Fed payment systems, but they also should anticipate rigorous oversight and operational requirements.
Next Steps
Banks that plan to use PPSI partnerships to issue stablecoins should:
- Review third-party relationships to confirm that due diligence and oversight meet updated standards.
- Update risk assessments to capture new requirements for reserve attestation, capital, and asset segregation.
- Strengthen monitoring and reporting to ensure compliance, including regular audits of partners and service providers.
Nonbanks should ensure:
- They have robust compliance programs now to meet higher governance, segregation, and reporting standards.
- Prepare scalable risk management and audit frameworks to meet increased regulatory scrutiny as they grow.
Stablecoins have driven the first federal supervisory framework for nonbanks operating nationally without a bank charter, exposing the limits of the state-based system. Over the next 12 to 18 months, it will become clear whether this model will expand to other nonbank payments. Institutions that see this as a new supervisory era will be better prepared.
