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The OCC’s final rule implementing the GENIUS Act drops a proposed presumption that certain arrangements between stablecoin issuers and third-party platforms could be unlawful. The rule still bars issuers from directly paying interest, but leaves platforms’ ability to offer rewards unresolved, with regulators indicating the arrangements will be assessed case by case.
The American Bankers Association accused the OCC of undermining Congress’s intent to protect local lending. CEO Rob Nichols argued that stablecoin rewards could weaken the distinction between payment stablecoins and bank deposits, while warning that responding to deposit flight only after it occurs would be too late.
Why it matters
The dispute centers on whether platforms such as Coinbase can offer yield on stablecoins even when issuers cannot pay interest directly. The GENIUS Act prohibits issuer-paid interest, but the final rule does not carry forward the proposal’s presumption against certain third-party arrangements.
The Blockchain Association welcomed the change, saying it aligns the rule more closely with the statute. It argued that clear standards for reserves, redemption and risk management could support competition and dollar-backed payments under federal oversight. The opposing positions reflect a broader fight over how stablecoin rewards should be treated in US financial regulation.
Market impact
TD Cowen viewed the final rule as negative for banks, citing uncertainty from the OCC’s case-by-case approach. Its Washington Research Group said ambiguity is likely to persist until courts rule on what arrangements are permitted, and noted that a future administration could appoint a comptroller with a different interpretation.
The policy debate also intersects with the stalled Clarity Act, where stablecoin rewards were contested during negotiations. For banks and crypto platforms, the immediate question is how the OCC applies its final framework to specific reward programs. The rule leaves that question open rather than establishing a blanket prohibition on third-party rewards.
Frequently asked questions
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What changed between the OCC’s proposed and final stablecoin rule?
The final rule drops a proposed presumption that certain issuer relationships with third-party platforms could be unlawful. It retains the ban on issuers directly paying interest.
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Can third-party platforms offer rewards on stablecoins under the final rule?
The final rule does not establish a blanket ban on third-party rewards. Regulators said arrangements would be handled case by case.
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Why does the American Bankers Association oppose the OCC’s approach?
The association argues rewards could blur the distinction between payment stablecoins and bank deposits and threaten funds banks use to make loans.
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Why did the Blockchain Association support the final rule?
It said removing the presumption brings the rule closer to the GENIUS Act’s text and supports clear standards for reserves, redemption and risk management.
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What could resolve uncertainty around stablecoin rewards?
TD Cowen said ambiguity may persist until courts rule on what is permitted. The OCC has said it will assess arrangements case by case.
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