OCC finalises stablecoin rules as bankers challenge rewards loophole

• The OCC has finalised federal rules implementing the GENIUS Act for payment stablecoins.
• The American Bankers Association argues that the rules leave room for crypto platforms to offer rewards through third parties.
• The dispute centres on how regulators will enforce the law’s prohibition on stablecoin issuer interest and yield payments.

The Office of the Comptroller of the Currency (OCC) has finalised rules implementing the GENIUS Act without adopting a proposed presumption against certain third-party stablecoin rewards.

The law prohibits payment stablecoin issuers from paying interest or yield, with the relevant requirements scheduled to take effect on 18 January 2027.

“Because payment stablecoins are a nascent market, the OCC does not believe that it is appropriate to impose a rebuttable presumption with respect to the yield prohibition at this time,” the agency stated in the final rule.

The OCC removed a proposal that would have presumed certain arrangements involving affiliates and third parties violated the yield restriction, leaving those arrangements subject to assessment under the applicable rules.

“The result is a final rule that will preserve the status quo for crypto platforms despite Congress’s clear intent to protect local lending,” American Bankers Association President and CEO Rob Nichols said in a statement.

The final framework also establishes requirements covering stablecoin reserves, redemptions, risk management, audits, reporting, supervision and certain custody activities.

The OCC said it plans further rulemaking as it gains experience identifying arrangements that could circumvent the prohibition, while banks continue to press for stricter limits on stablecoin rewards.

The final rule establishes federal oversight requirements for payment stablecoin issuers, but the treatment of third-party rewards remains a point of disagreement between regulators and the banking industry.