Treasury and OCC Become Sole Authorities in Stablecoin Regulation

The failure of the CLARITY Act in the US Senate has shifted the regulatory burden to the Treasury Department and the Office of the Comptroller of the Currency, making them the sole authorities building stablecoin regulatory infrastructure. This development has created a critical timeline for stablecoin issuers and agent payment platforms.

Three distinct regulatory milestones will shape the competitive landscape for stablecoins this week: the Treasury NPRM comment period closes on October 17; the OCC is committed to finalizing its implementing rule by November; and the GENIUS Act's effective date is January 18, 2027. The first deadline pertains to the Treasury Department's Notice of Proposed Rulemaking regarding Payment Stablecoin Offer, Sale, and Issuance (RIN 1505-AC95), which defines an issuer based on economic substance rather than specific activity.

Section 3(a) of the proposal makes it unlawful for any entity that is not a Permitted Payment Stablecoin Issuer to issue such assets in the US, creating a high barrier to entry. This could favor incumbent stablecoin issuers with existing regulatory relationships over newcomers. The OCC has been active in granting final approval to Circle and issuing preliminary conditional approvals to Coinbase and other applicants.

The GENIUS Act mandates that Digital Asset Service Providers cease offering or selling non-PPSI stablecoins to US persons by July 18, 2028, but the broader compliance effective date is January 18, 2027. If the Treasury and OCC finalize their rules by late 2026, this date becomes the primary driver for market consolidation.