The Bitcoin Banking Standard – Edition 17

On September 24 the Federal Reserve proposed two rules implementing the GENIUS Act for the stablecoin issuers it supervises, Governor Michael Barr asked for public comment on reserve risk, redemption rights and the anti-money-laundering standard, and comments are due November 30. The OCC granted preliminary conditional approval to three national trust banks on September 18 and to a credit card bank, Mission Lane, reported September 28, and on October 2 the Independent Community Bankers of America sued the OCC, arguing that its rule letting national trust banks conduct non-fiduciary activities exceeds the agency's authority. On October 1 the SEC proposed custody rules for investment advisers and funds that would let eligible state trust companies serve as custodians, while the CFTC's digital-asset market rules remain under White House review. On October 5 FinCEN withdrew its 2020 proposal on transactions with unhosted wallets and its 2023 proposal on digital-asset mixing, a week after a Senate report examined USDT's use in Iran-linked finance. Stablecoin settlement went live in four places: SoFi Bank's card program, Fiserv's digital asset platform with the Bank of North Dakota's Roughrider Coin, Open Standard's OUSD, and an expanded Citi and Coinbase service for corporate clients. Six banks including Bank of America and Capital One published principles for payments initiated by AI agents, and Governor Christopher Waller described the open problems in agent-delegated payments. American Banker traced an outage at 23 credit unions to a data-center failure at a core processor the NCUA has no authority to examine.

Federal Reserve proposes reserve, capital and application rules for bank-issued stablecoins

On September 24 the Federal Reserve Board requested public comment on two proposals implementing the GENIUS Act for the payment stablecoin issuers it supervises. Both were published in the Federal Register on September 29, and comments are due November 30. The first proposal requires one-to-one reserve backing in short-term Treasury bills and other high-quality liquid assets, sets minimum capital for credit, operational and non-reserve risks, and includes a separate capital requirement for newly formed issuers. It also sets risk-management standards, requires firms holding reserves to segregate customer assets, and states which stablecoin activities are permissible for participating banks.

The second proposal sets the application process for an insured state member bank that wants to issue payment stablecoins through a subsidiary, with business-plan and financial-information requirements and procedures for appeals and hearings. In a separate statement, Governor Michael Barr called the framework "an important step in GENIUS Act implementation." He asked for public comment on how reserves account for interest-rate and currency risk and on how redemption rights are defined, and said the proposal's anti-money-laundering enforcement standard is too narrow.

For banks: These are proposals, and the text can change after the comment period. As drafted, they would govern what a Board-supervised issuer's reserves may hold, the capital it carries, including a separate requirement for a new issuer, and what a state member bank's application must contain. Barr's statement identifies the provisions one Board member has asked the public to address before the rules are final.

Sources: Federal Reserve (proposals) | Federal Reserve (Barr) | Federal Register

OCC conditionally approves three trust banks and a credit card bank; ICBA sues over trust-bank powers

On September 18 the OCC granted preliminary conditional approval to three national trust banks. Bastion, a stablecoin infrastructure provider that has held a New York trust charter since February 2025, will operate as Bastion Platforms National Trust Company, offering stablecoin custody, white-label wallet and issuance services, and payment infrastructure. Agora, issuer of the AUSD stablecoin, says the charter brings its stablecoin, custody and transaction infrastructure under federal supervision. Catena Trust Bank, backed by Circle co-founder Sean Neville, describes itself as financial infrastructure for AI agents. PYMNTS cited the OCC's August count of 40 de novo applications in 18 months, compared with 48 from 2011 through 2024.

Banking Dive reported on September 28 that the OCC had conditionally approved Mission Lane Bank, N.A., a credit card bank chartered under the Competitive Equality Banking Act, which Banking Dive described as the first new OCC-regulated credit card bank in more than 20 years. Mission Lane serves about 3 million customers in 45 states and now relies on partner banks TAB Bank and WebBank. It must raise $35 million in paid-in capital within 12 months and hold a tier 1 leverage ratio of at least 11% for its first three years. FDIC approval and other pre-opening requirements remain.

On October 2 the Independent Community Bankers of America sued the OCC and Comptroller Jonathan Gould in the U.S. District Court for the District of Columbia (No. 1:26-cv-03441). The complaint argues that the National Bank Act lets the OCC charter a national trust bank only to exercise fiduciary powers, not to run a business that is mainly non-fiduciary and takes no deposits. It challenges three actions: the OCC's March 2026 rule replacing "fiduciary activities" with "the operations of a trust company and activities related thereto," Interpretive Letter 1176 from January 2021, and the OCC's February 2026 conditional approval of Protego's national trust bank. The ICBA says the OCC has approved or conditionally approved 21 national trust charters, at least 13 for digital-asset companies. It asks the court to vacate the rule, the letter and Protego's approval, and to bar further approvals under the rule.

For banks: Preliminary conditional approval is not a final charter. Mission Lane's capital and leverage conditions are the only ones in this group reported so far; the decision-letter terms for Bastion, Agora and Catena had not been reported by October 1. Per Ballard Spahr's summary of the complaint, the ICBA does not ask the court to vacate charters already granted other than Protego's, though its request to bar further approvals under the March rule would reach pending applications if granted. The court has not ruled, and the OCC has not filed a response.

Sources: PYMNTS | Banking Dive | Ballard Spahr | American Banker

SEC proposes custody rules naming state trust companies; CFTC market rules remain at the White House

On October 1 the SEC proposed amendments to how registered investment advisers and regulated funds hold digital assets. Under the proposal, eligible state trust companies could serve as custodians, blockchain records could count toward compliance under stated conditions, and an adviser could hold client assets itself only when no qualified custodian is available. The proposal was published in the Federal Register on October 6, and comments are due December 7. Chairman Paul Atkins said more digital-asset proposals are coming. In a statement the same day, Commissioner Hester Peirce said the 2023 custody proposal had made compliant custody of digital assets look impossible, and she asked for detailed comments on this one.

The CFTC's "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets," filed September 17 with the Office of Information and Regulatory Affairs, the White House office that reviews rules before publication, has not been released. The agency has not described its contents. On September 23 Chair Michael Selig told CNBC the agency is reevaluating "all of our rules and regulations" for markets that run "24-7, on-chain."

For banks: The SEC text is a proposal. As drafted, it would add eligible state trust companies to the institutions advisers and funds may use to hold digital assets, which bears on state-chartered trust banks and on the national trust banks approved in September only if they meet the proposal's eligibility terms. The CFTC proposal's definitions of custody, settlement and intermediaries are not yet public, and it will carry its own comment period once cleared.

Sources: SEC (custody proposal) | SEC (Peirce) | The Block

FinCEN withdraws its unhosted-wallet and mixing proposals; Senate report faults Tether's freezing record

On October 5 FinCEN withdrew two proposals that never took effect. The first, from December 2020, would have required recordkeeping and verification for transactions with unhosted wallets; CoinDesk described it as a $10,000 reporting rule for digital assets sent to private wallets. The second, from October 2023, would have designated international convertible virtual currency mixing a class of transactions of primary money laundering concern. FinCEN said the mixing definition was broad enough to chill legitimate activity and to burden covered institutions, and tied both withdrawals to the administration's deregulatory agenda and its July 2025 digital-asset report. It said it will keep monitoring mixer activity and "may take appropriate steps in the future." The ICBA told American Banker it was disappointed.

A week earlier, on September 28, a 28-page report led by Sen. Richard Blumenthal analyzed 846 sanctioned Iran-linked wallets and found that 87% of 757 wallets tied to Iranian terrorism financing mainly used Tether's USDT. The report says Tether repeatedly failed to freeze wallets showing indicators of illicit activity. Tether responded that it has helped freeze $550 million in Iran-linked USDT over the past year.

For banks: Neither FinCEN proposal was final, so existing Bank Secrecy Act obligations do not change, and the wallet-level recordkeeping requirement proposed in 2020 for transfers to self-custodied addresses is no longer pending. FinCEN kept the option of acting on mixing later. The Senate report is not a regulatory finding, and Tether disputes its conclusions.

Sources: American Banker | CoinDesk | The Block

Stablecoin settlement goes live at SoFi, on Fiserv's platform and through Open Standard; Citi expands with Coinbase

On September 22 SoFi and Mastercard said stablecoin settlement is live across SoFi Bank, N.A.'s debit and credit card program, and that SoFi is migrating the full program, which it expects to exceed $25 billion in annualized volume, to settlement in SoFiUSD. SoFiUSD is issued by the national bank, redeemable 1:1 for dollars and backed mainly by cash. CEO Anthony Noto said merchants do not have to hold the stablecoin: they receive settlement in a SoFi Bank account and can withdraw to cash at any hour.

On October 1 Fiserv said its digital asset platform is in production, handling issuance, reserves, custody and settlement for Roughrider Coin, a stablecoin backed by the Bank of North Dakota and issued by VersaBank, with Fireblocks as infrastructure and transactions on Solana. About 90 North Dakota banks and credit unions can use it for interbank transfers through Fiserv's Commercial Center. Fiserv also listed stablecoin cards, treasury automation and tokenized deposits among the platform's capabilities and gave no update on its own FIUSD stablecoin.

Also on October 1, Open Standard, a group of more than 140 banks, fintechs, payments companies and digital-asset firms, launched OUSD, American Banker reported. Mastercard, Visa, Stripe and Coinbase each supplied $1 billion of initial liquidity. Bridge issues the token, BNY Mellon, Lead Bank and BlackRock hold reserves, and members include U.S. Bank, Huntington, Citizens, Cross River, The Bancorp and Pathward. Rewards follow the transaction volume a participant generates, not the balances it holds. Separately, on September 28 Citi and Coinbase expanded their arrangement so that Citi's institutional clients in the U.S. can receive stablecoin payments over Coinbase's rails with automatic conversion to dollars.

For banks: The four arrangements put issuance and reserves with different parties. SoFi's stablecoin is issued by the national bank itself. Roughrider Coin is backed by a state-owned bank, issued by another bank and run on a core vendor's platform that institutions reach through a commercial banking product they already use. OUSD is issued by a non-bank with reserves held at two banks and an asset manager, and member banks earn on volume. Citi's clients never hold the token. All four are operating before final GENIUS Act rules set reserve and redemption requirements.

Sources: The Block (SoFi) | Banking Dive | American Banker | The Block (Citi)

Six banks publish principles for AI-agent payments; Governor Waller describes the open problems

On September 22 ASB Bank, Bank of America, Capital One, Commonwealth Bank of Australia, ING and NatWest published "Building Trust in Agentic Commerce," setting out five principles for payments that AI agents initiate on a customer's behalf: transparency, safety, privacy and data, choice, and interoperability. The paper asks payment providers to preserve evidence of the customer's instruction, authentication, intent, the transaction decision and the outcome, so that scams can be investigated and disputes resolved. The principles are voluntary, and the banks plan a second paper on implementation. KeyBanc analysts noted the paper has no fee, interchange or routing provisions and no timetable.

On September 29, in remarks at Sibos 2026, Federal Reserve Governor Christopher Waller separated agent-assisted commerce, where the buyer makes the decision, from agent-delegated commerce, where an agent buys within preset limits using dedicated funding. He named authentication, liability, and documenting an agent's authority and intent as the problems still open.

For banks: Neither the paper nor the speech sets binding requirements. Both describe the same category of record: who authorized an agent, within what limits, and what the agent did. The six banks say implementation will be addressed in their second paper, for which no date has been given.

Sources: Bank of America | American Banker | Federal Reserve

Data-center cooling failure takes 23 credit unions offline; NCUA cannot examine the core vendor

American Banker reported on September 21 that a data-center cooling failure on September 15 disrupted credit unions in 14 states. Some of the affected equipment belonged to Sharetec, a Fort Wayne, Indiana, core processor, which told customers its backup systems did not have time to take over. American Banker identified 23 affected institutions holding $2.56 billion in assets and roughly 200,000 members.

The Bank Service Company Act gives the OCC, FDIC and Federal Reserve authority to examine bank service providers. The NCUA's equivalent authority expired on December 31, 2001, and the agency asked Congress to restore it every year through 2024. In its December 2025 annual report, the Financial Stability Oversight Council dropped the recommendation, saying the NCUA "may have sufficient authority to monitor these risks through information sharing agreements." The NCUA has not said which agreements.

For banks: The outage is a dated, multi-institution case of one core processor's data-center failure taking its clients offline at once. For credit unions, oversight of a core vendor runs through contract terms and information-sharing arrangements, not direct NCUA examination. The core-provider guidance the Fed, FDIC, OCC and NCUA proposed on September 11, covered in Edition 16, carries a 60-day comment period from Federal Register publication.

Sources: American Banker

What to Watch

• Fed GENIUS Act comments due November 30. Both Federal Reserve proposals were published in the Federal Register on September 29. Governor Barr's statement lists reserve interest-rate and currency risk, the definition of redemption rights, and the anti-money-laundering enforcement standard as open points. (Federal Register)
• ICBA v. OCC. The case is No. 1:26-cv-03441 in the U.S. District Court for the District of Columbia. No schedule or OCC response had been reported as of October 6. (Ballard Spahr)
• SEC custody comments due December 7. The adviser and fund custody proposal, File No. S7-2026-35, was published in the Federal Register on October 6. Chairman Atkins said more digital-asset proposals will follow. (Federal Register)
• FinCEN withdrawal text. The mixing withdrawal was filed for public inspection on October 5 and scheduled for Federal Register publication October 6. It states what FinCEN will keep monitoring. (Federal Register public inspection)
• Other GENIUS Act rules. The OCC has said it expects to finalize its GENIUS Act rule in November. At a CoinDesk event on September 22, Treasury Assistant Secretary Luke Pettit said Treasury and the banking agencies are "well on track" for the statute's deadlines. (CoinDesk)
• CFTC rules at OIRA. The CFTC's digital-asset market rules are still under White House review. No clearance date has been announced. (The Block)
• Lame-duck session. Pettit said "the waters are incredibly chilled" for the Clarity Act in Congress, and he and White House adviser Patrick Witt both said the lame-duck session offers little prospect for the bill. The motion to reconsider preserved by Senator Tillis's September 15 vote remains available. (CoinDesk)
• Charter pipeline. The OCC's decision letters for Bastion, Agora and Catena will show each bank's capital floor, permitted activities at opening and pre-opening requirements; Mission Lane still needs FDIC approval. On September 18 online lender Avant, which has originated about $17.6 billion through WebBank since 2013, filed with the OCC and FDIC for a de novo national bank that would start with cards and personal loans. Under the FDIC's revised process for applications received after August 15, qualified applicants receive contingent authorization within 120 days and then have up to 12 months to obtain final approval. (American Banker | ABA Banking Journal)
• OCC examiner time. Comptroller Jonathan Gould announced limits on the workdays examiners may spend on site at a bank, saying supervision should focus on "material financial risks." The OCC has not published the number of days or whether limits vary by bank size or exam type. (American Banker)
• State AI laws and preemption. On September 24, 26 state attorneys general asked Congress for federal safety rules for frontier AI and asked it not to preempt state AI laws, citing Colorado's requirement that lenders disclose when AI plays a role in a lending decision. (American Banker)

Looking to integrate Bitcoin and stablecoin products into your financial institution? Learn how at galoy.io. Track developments between issues on the Regulatory Radar.