Stablecoins can only assure dollar dominance if the rules make sense

• Key insight: The OCC’s proposed rules to implement the GENIUS Act are rigorous, but a few of the suggestions could produce the very crises they are meant to prevent.
• Supporting data: In March 2023, USDC temporarily lost its dollar peg precisely because its reserves included over $3 billion in uninsured deposits at Silicon Valley Bank.
• Forward look:  Done right, stablecoins are infrastructure for the next century of dollar dominance.

I spent a decade as a bank examiner at the Office of the Comptroller of the Currency. My job was to walk into banks and ask hard questions: Is your liquidity real? What happens to your customers if something goes wrong? Those instincts never leave you.

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When I read the OCC’s proposed rules to implement the GENIUS Act, I recognized them immediately. This is what rigorous rulemaking looks like: 376 pages, 211 questions, a genuine effort to build a framework from the ground up for a product that didn’t exist a decade ago, in close coordination with those building the technology. My bank, Anchorage Digital, filed a formal comment because we believe that our experience and expertise are worth sharing. And because a few of the proposed design choices, however well-intentioned, could produce the very crises they are meant to prevent.

The central promise of any stablecoin is simple: one dollar in, one dollar out, always. Everything in the OCC’s draft regulation flows from that commitment. The OCC is right to make redemption certainty the organizing principle of the framework. Where the proposal needs refinement is in the mechanics of how that certainty gets delivered.

Consider the proposed seven-day redemption gate. The rule would automatically pause redemptions for any issuer facing withdrawals exceeding 10% of outstanding supply within 24 hours. The intent, which is sound, is to give an issuer time to liquidate assets and meet obligations under stress. The effect would be the opposite.

The Securities and Exchange Commission learned this lesson recently with money market funds. When regulators linked a specific, publicly reported trigger to an automatic restriction, sophisticated investors began redeeming before the gate dropped, accelerating the outflows the rule was designed to slow. The SEC eliminated that mechanism in 2023. Stablecoin holders have something money market investors never did: real-time, on-chain visibility into aggregate flows. They will watch the threshold in real time. An automatic tripwire in a rule that the market can observe and anticipate is a countdown clock, not a safeguard.

The proposed requirement that issuers hold 10% of reserves as deposits at FDIC-insured banks presents a similar problem. The stated goal is daily liquidity. The operational consequence, at any meaningful scale, is concentrating stablecoin reserves in uninsured bank deposits. In March 2023, USDC temporarily lost its dollar peg precisely because its reserves included over $3 billion in uninsured deposits at Silicon Valley Bank. The rule, as written, would require large issuers to hold more in uninsured deposits than USDC held at SVB.

Tokenized government money market funds, the primary reserve asset for the stablecoins we issue, offer same-day or next-day liquidity backed by Treasury securities. They carry no single-institution credit risk. Government money market funds have historically seen inflows during periods of stress, not outflows. The OCC’s goal should be demonstrated liquidity capability. The instrument used to achieve it should not introduce the counterparty risk that caused the very failure cited in support of the rule.

The right framework for both of these concerns is principles-based. Set the outcome: Issuers must demonstrate the ability to monetize a defined percentage of reserves overnight, and one-to-one backing must hold under significant stress. Let each issuer show how they meet that standard, subject to supervisory review. The OCC has been doing exactly this kind of individualized, risk-based examination for national banks for more than 160 years. And it is very good at it.

One more structural point warrants attention. Most existing issuers hold reserves on their own balance sheet, creating a creditor relationship with holders, meaning in an insolvency, stablecoin holders wait in line alongside other claimants. Our own OCC-chartered bank holds reserves for each of our stablecoins in a separate legal trust, siloed from any corporate assets. Under that structure, reserves transfer to a successor trustee and redemptions continue uninterrupted, because the assets were never ours to begin with. The GENIUS Act permits this model. The final rule should make clear that it accommodates it.

Stablecoins, done right, are infrastructure for the next century of dollar dominance. Treasury Secretary Scott Bessent has called the GENIUS Act the means to this end, but that only works if American rules make American issuers the most trusted, secure option in the world. 

That trust is not earned on a calm day. It is earned the day redemptions spike, reserves are scrutinized, and holders decide whether to wait or run, and the rules hold. The OCC has spent 160 years building that kind of trust. This framework is how it does it again.