OCC rule leaves stablecoin rewards open to case-by-case review

U.S. bank regulator the Office of the Comptroller of the Currency (OCC) finalized rules for stablecoin issuers on Oct. 21, leaving crypto platforms able to offer some interest-like rewards while requiring each arrangement to be judged on its facts. The distinction matters to customers who earn rewards for holding stablecoins, tokens designed to keep a steady value, often around $1. The Associated Press report said exchanges such as Coinbase and Robinhood can pass along earnings from stablecoin reserves as rewards.

Who can pay stablecoin holders yield under the rule?

The GENIUS Act bars permitted stablecoin issuers from paying holders interest or yield solely because they hold, use or retain a payment stablecoin. The OCC’s final rule, published in the Federal Register on Oct. 23, keeps that ban and removes a proposed “rebuttable presumption”—a rule that would have presumed certain arrangements broke the ban unless an issuer proved otherwise.

The OCC did not set out a general approval for exchange rewards. It said it would assess whether a particular arrangement violates the law based on all relevant facts and circumstances. The agency also said it retains authority to address attempts to evade the ban.

Does the rule protect existing rewards programs?

No. The OCC said programs that existed before the GENIUS Act are not automatically treated as lawful. They will be evaluated under the same standard as programs created later. The agency declined to list specific arrangements as allowed or prohibited, leaving the result dependent on how each program works.

The rule applies to issuers under OCC jurisdiction, which include some banks and other permitted entities. It does not say that every exchange reward program is allowed. In its report, AP described the distinction: issuers such as Circle cannot pay holders yield directly, while exchanges that trade and hold stablecoins may pass earnings to customers, subject to case-by-case review.

When do the rules take effect?

The OCC announced the rule on Oct. 21. The Federal Register’s final rule sets Jan. 18, 2027, as its effective date. That is also when the GENIUS Act takes effect.

Banks have argued that stablecoin rewards could draw deposits away from traditional lenders and reduce money available for loans. The OCC’s rule leaves the issuer ban in place but does not impose a blanket ban on rewards paid through other arrangements. Whether a program can continue will turn on the specific facts and the law’s prohibition on paying yield solely for holding, using or retaining a stablecoin.

References

• Associated Press report — apnews.com
• Federal Register’s final rule — govinfo.gov