Community Banks Get Green Light on Stablecoin Partnerships From OCC

The conversation around digital payments in the U.S. banking system just got a boost. The Office of the Comptroller of the Currency (OCC) is signaling to community banks that working with stablecoin companies could be a real way to expand services and stay competitive in a fast-changing financial landscape.

Good to know

• The OCC is considering updates to its regulatory approach to align with digital innovation.
• Community banks may use stablecoin partnerships to compete with larger players.
• The GENIUS Act positions the OCC as the main regulator for stablecoin issuers.

Community banks have long been the backbone of local economies, but they’ve struggled to keep pace with the rapid growth of fintech and digital assets. Now, the OCC is suggesting a path forward. In a post on X, the regulator wrote:

“Community banks can partner with companies developing stablecoins to foster innovation and offer new products. The OCC will review and update as necessary its regulatory and supervisory approach to ensure it supports innovations in banking and the vitality of community banks.”

A Shift in Tone

This message represents a softer stance than in recent years, where the OCC leaned more cautious on crypto engagement. The agency once took bold steps—such as approving crypto custody and stablecoin reserves under Acting Comptroller Brian Brooks in 2020—but later pulled back. In 2021, the OCC even required written supervisory approval before banks could touch crypto. That restriction was only lifted in March 2025, setting the stage for today’s renewed interest.

Since then, a series of letters clarified that national banks and federal savings associations may provide crypto custody and outsource execution services. This evolving framework has made it easier for smaller institutions to explore the space without guessing where the regulator stands.

For community banks, stablecoins present an opportunity to add modern payment options without building technology from scratch. Jonathan V. Gould, sworn in as the 32nd Comptroller of the Currency in July 2025, underlined this in his remarks:

“Community banks play a crucial role in providing essential financial services. Stablecoins are one way for these institutions to better serve their communities’ payment needs.”

By tapping into blockchain-based payment rails, smaller banks could cut settlement costs, reach new customers, and compete more directly with larger financial institutions that already have the tech advantage.

The Role of the GENIUS Act

Backing this policy shift is the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, better known as the GENIUS Act. The legislation formally positioned the OCC as the lead regulator for non-bank stablecoin issuers with federal charters. The law gives the OCC both authority and responsibility to set the rules of the road.

While critics argue that tying community banks too closely to crypto could expose them to new risks, supporters say the benefits—efficiency, inclusion, and reduced transaction friction—outweigh the concerns.