OCC finalizes GENIUS Act stablecoin rule, leaving partner rewards to case-by-case review
The Office of the Comptroller of the Currency finalized its rules under the GENIUS Act, dropping a proposed ban on third-party rewards while keeping direct issuer interest prohibited, drawing sharp criticism from banking groups.
The Office of the Comptroller of the Currency finalized its regulatory framework implementing the GENIUS Act on October 21, 2026, becoming the first federal banking regulator to complete rulemaking under the statute. Set to take effect alongside the statute on January 18, 2027, the 721-page final rule governs stablecoin issuance, custody, and supervision for entities under OCC jurisdiction, while leaving anti-money-laundering and sanctions rules for a separate rulemaking.[1][4][5][9][12]
A central change in the final regulation is the agency's decision to drop a proposed rebuttable presumption that treats third-party or affiliate reward arrangements as illegal evasions of the statutory ban on issuer yields. Stablecoin issuers remain strictly barred from paying interest directly to holders solely for holding or using a token. However, the OCC noted payments routed through intermediaries might be tied to other bona fide services, leaving partner programs without automatic safe harbors or grandfathering and subject to individual reviews.[1][4][10][11]
The regulator also eased several proposed operational hurdles for issuers. The OCC lowered an immediate-liquidity reserve floor to 5% from a proposed 10% and scrapped both an insured-deposit mandate for large issuers and an automatic seven-day redemption extension during high-volume spikes. Instead, issuers facing daily redemptions exceeding 10% of outstanding supply must notify the OCC within 24 hours to request an extension, while maintaining a standard two-business-day redemption requirement and a permanent $5 million capital floor.[1][13]
The softened yield test quickly drew strong pushback from the banking sector. American Bankers Association President Rob Nichols warned the decision creates gaps that undermine Congress's intent, warning that crypto yield arrangements could spark deposit flight and jeopardize the funding banks rely on to issue loans. Meanwhile, Coinbase Chief Policy Officer Faryar Shirzad said there was "a lot to like" in the rule, and Treasury Secretary Scott Bessent praised the framework as a crucial milestone for digital asset dominance.[1][3][4][7][8][14]
Key facts
- The OCC issued its final stablecoin framework under the GENIUS Act on October 21, 2026, taking effect January 18, 2027.
- The agency eliminated a proposed rebuttable presumption that partner and affiliate rewards programs violate the statutory stablecoin yield ban.
- Issuers remain barred from directly paying interest to holders solely for retaining stablecoins, and existing third-party reward programs receive no safe harbor.
- The final rule reduced the proposed immediate-liquidity requirement from 10% to 5% and dropped an insured-deposit requirement for large issuers.
- The automatic seven-day redemption extension was removed; issuers experiencing daily redemptions over 10% must alert the OCC within 24 hours to request discretionary relief.
- Existing stablecoin issuers must submit a substantially complete application and request a waiver by January 18, 2027, to receive up to 12 months of relief to continue operations.
- American Bankers Association President Rob Nichols criticized the rule, arguing unaddressed reward loopholes risk siphoning deposits away from community bank lending.
Sources · 10 sources
- UN
UnchainedArticle ·
OCC’s Final Stablecoin Rule Backs Off Yield Test, Scraps Automatic Redemption Extension The Office of the Comptroller of the Currency (OCC) will not presume that stablecoin issuers break the GENIUS Act’s yield ban when affiliates or related third parties pass payments on to holders. The agency removed that test from its final rule implementing the 2025 stablecoin law, which it announced on Wednesday. The rule applies to stablecoin issuers the OCC licenses and foreign issuers within its reach, as well as certain custody services offered by OCC-supervised entities, which include national banks, federal savings associations and federal branches. It takes effect on January 18, 2027 , the same day as the GENIUS Act itself. Rules tied to the Bank Secrecy Act, anti-money laundering and sanctions are not included and will come in a separate rulemaking with the Treasury Department. Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter . Yield Test Removed The OCC’s February proposal would have treated certain deals between an issuer and its affiliates or related third parties as violating the statute’s ban on issuers paying interest or yield to holders, unless the issuer rebutted it. The Federal Reserve’s September proposal took a similar approach . In the final rule text , the OCC wrote that “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 said it keeps its authority to act against evasion of the ban, and that it will review arrangements through license applications and ongoing supervision, then issue public guidance when it finds violations. Redemptions and Capital Issuers must still honor redemptions within two business days . The OCC cut a proposed automatic seven-day extension of the redemption period that would have applied whenever requests topped 10% of outstanding issuance in a day. Under the final rule, an issuer that receives redemption requests above 10% of a stablecoin brand’s outstanding issuance in a single 24-hour period must notify the agency within 24 hours, as the proposal also required, and may ask the OCC to extend its redemption deadline. The agency can approve or deny that request. The rule keeps a $5 million minimum capital floor and applies it to issuers beyond their first three years, the period the proposal had limited it to. “We are providing a clear, practical framework for payment stablecoin innovation, with strong standards for reserve backing, redemption, and risk management,” Comptroller of the Currency Jonathan V. Gould said in the agency’s release. Treasury Secretary Scott Bessent compared the law to President Abraham Lincoln’s National Currency Act of 1863, saying in the OCC’s release that “the GENIUS Act establishes a federal framework for payment stablecoins in the digital age.” The OCC said it received roughly 328 comments on the proposal. The agency said it will announce in a separate release when it begins accepting applications and waiver requests from prospective issuers. Related Listen: Why Banks Failed to Kill Stablecoin Rewards in the Clarity Act The post OCC’s Final Stablecoin Rule Backs Off Yield Test, Scraps Automatic Redemption Extension appeared first on Unchained .
Open source - CR
CryptoSlateArticle ·
OCC waiver rule puts active stablecoin issuers on notice Existing US issuers awaiting OCC approval need discretionary relief to keep issuing from Jan. 18, 2027; filing alone is insufficient. Read the full story on CryptoSlate Understand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Open source - TB
The Block@TheBlockCoPost on X ·
THE BLOCK: The fight between banks and crypto platforms has reignited after the OCC declined to weigh in on third-party stablecoin rewards, drawing accusations from the banking lobby that regulators are undermining Congress. "Those gaps risk undermining the distinction Congress drew between payment stablecoins and traditional bank deposits, threatening the funds banks use to make the loans that drive the U.S. economy," said ABA President Rob Nichols on Wednesday.
Open source - UN
UnchainedArticle ·
Are You Sure Your USDC Rewards Are Safe? Under the GENIUS Act, the stablecoin law Congress passed in July 2025, companies that issue stablecoins can’t pay interest to the people who hold them. Some exchanges pay holders anyway. Coinbase (COIN) pays 3.75% a year to customers who hold USDC, the dollar-pegged stablecoin issued by Circle, as long as they belong to Coinbase One, its paid membership tier. Coinbase pays those rewards itself, and under a revenue-sharing agreement it receives a share of the interest Circle earns on USDC’s reserves. Whether rewards programs like these violate the GENIUS Act’s ban on interest remains a gray area. Banks say they amount to the same interest paid another way, and have urged the Office of the Comptroller of the Currency (OCC) to tighten its rules on money passed to holders through partners. (Rewards were also a major sticking point in talks over the CLARITY Act, the broader crypto market-structure bill, which failed in September .) On Oct. 21, the OCC, the federal regulator for nonbank stablecoin issuers, finalized its rule , effective Jan. 18, 2027, and dropped its proposed presumption that such payouts break the ban, choosing to judge each arrangement case by case. In other words, the OCC went the opposite way from the stricter test the banks wanted. For Coinbase, that means, at least for now, its USDC rewards can continue unabated. The rule gives them no safe harbor, so they remain open to challenge. For USDC holders, the 3.75% is not guaranteed. If the OCC decides Coinbase’s program is just a loophole to bypass the GENIUS Act’s ban on stablecoin interest, the payouts could be shut down. For Coinbase shareholders, the question is how much of the company rides on those rewards. Coinbase fought to keep them: in January, CEO Brian Armstrong pulled the company’s support for a Senate draft of the CLARITY Act, objecting to “draft amendments that would kill rewards on stablecoins, allowing banks to ban their competition” and other provisions. Stablecoins brought in $292.1 million in Coinbase’s second quarter, its 10-Q shows , about a quarter of its net revenue. Whether losing the rewards would hurt depends on two things: how much the rewards already cost Coinbase, and how much of its stablecoin revenue comes from USDC that earns no rewards at all. What the Rule Says The agency has kept the ban on issuers paying holders “any form of interest or yield” “solely in connection with the holding, use, or retention” of a stablecoin. However, the rule also says a payment that reaches stablecoin holders through an intermediary “might be made, at least in part, for other reasons,” which could put it outside the ban. Coinbase describes its rewards as “a loyalty program funded by Coinbase.” Whether that is enough is now the OCC’s call. The agency wrote that it “declines to presume that rewards programs that predated the GENIUS Act comply with the GENIUS Act,” so Coinbase’s program gets no grandfathering. On payments more generally, the rule says “payments for bona fide services generally would not be prohibited” when no other facts point the other way, without naming any particular arrangement. The agency added that as the payment stablecoin market evolves, it expects to gain enough real-world “experience with identifying prohibited transactions” to eventually propose a clearer rule defining its “yield prohibition.” Rob Nichols, president and CEO of the American Bankers Association, said the result “will preserve the status quo for crypto platforms despite Congress’s clear intent to protect local lending.” Faryar Shirzad, Coinbase’s chief policy officer, posted that in the rule “there’s a lot to like.” How the Money Moves Circle (CRCL) earns interest on USDC’s reserves. Under its agreement with Coinbase, described in Circle’s IPO filing , Coinbase receives the reserve income on USDC held in Coinbase products, after a slice Circle keeps, plus half of what remains on most USDC held elsewhere. Circle said it paid about $819 million, or 59 cents of every revenue dollar, to distribution partners and transaction costs in the first half of 2026. In the rest of the issue, subscribers get: How much of what Coinbase earns on its customers’ USDC the rewards already eat , and how that changed What happens to Coinbase’s stablecoin revenue if the rewards end , and how much customer USDC would have to leave for it to hurt The one scenario that puts all $292 million of Coinbase’s quarterly stablecoin revenue in play, and who holds the leverage Why Circle’s planned move to a New York trust company leaves open which rulebook judges USDC’s rewards Bull, base and bear ranges for Coinbase’s stablecoin revenue after rewards, and the dates that decide them Already a subscriber? Keep reading. Grab the limited-time offer! Subscribe to read the rest. Get a 2-week free trial Renews at $25/month Upgrade Already a Member? Login Here. Why serious investors subscribe: Clear thinking during macro regime changes Fewer trades, better decisions Avoiding one bad allocation often matters more than finding one great trade The post Are You Sure Your USDC Rewards Are Safe? appeared first on Unchained .
Open source - CO
CoindeskArticle ·
OCC's final rule to start fresh in weighing stablecoin rewards against GENIUS Act ban The U.S. Office of the Comptroller of the Currency is the first of several federal agencies to finish writing regulations under the act.
Open source - CR
CryptoSlate@CryptoSlatePost on X ·
The OCC can give existing US stablecoin issuers up to 12 months of relief from prior approval. Filing alone does not authorize issuance. They must request a waiver with a substantially complete application pending by Jan. 18, 2027. via @akibablade https://t.co/mSzLGDQW9p
Open source - CT
Coin TelegraphArticle ·
American Bankers Association: OCC’s GENIUS rules ‘undermine’ US Congress Banking advocacy organizations are pushing back against the OCC’s finalized rules on a stablecoin law, arguing against changes to provisions on yield.
Open source - CN
crypto.news@cryptodotnewsPost on X ·
JUST IN: American Bankers Association warns OCC stablecoin rules leave yield loophole open The banking group says the GENIUS Act’s final rule could allow stablecoin rewards to compete with bank deposits, potentially accelerating deposit outflows. https://t.co/nUQhQkun0K
Open source - TB
The BlockArticle ·
First out the gate: OCC debuts final rule implementing Trump-signed GENIUS Act OCC published its final GENIUS Act stablecoin rule, effective Jan. 18, dropping a proposed presumption on third-party rewards arrangements.
Open source - CO
CoinDesk@CoinDeskPost on X ·
JUST IN: The OCC issues the first final rule under the GENIUS Act requiring crypto exchanges to seek approval for existing stablecoin rewards programs, with no safe harbors, as the regulator warns it “will not presume” programs that predated the law comply with it. https://t.co/lexpLTrogQ
Open source - WB
Wu Blockchain@WuBlockchainPost on X ·
OCC Finalizes First GENIUS Act Rule: No Safe Harbor for Existing Stablecoin Rewards The OCC has issued its first final rule implementing the GENIUS Act, covering stablecoin issuance, custody, and third-party partnerships, effective January 18, 2027. Existing yield and rewards programs receive no automatic grandfathering or safe harbor; compliance will be assessed case by case. The act prohibits issuers from paying yield solely for holding, using, or retaining stablecoins, but does not ban all third-party rewards. The OCC said rewards based at least partly on other factors may fall outside the prohibition. The implications for programs offered by Coinbase, PayPal, and Kraken remain uncertain.
Open source - CR
CryptoSlateArticle ·
US quietly eases stablecoin reserve rules as banks warn billions could shift away from lending Treasury Secretary Scott Bessent compared the GENIUS Act to the National Currency Act of 1863 on Oct. 21, the day the Office of the Comptroller of the Currency (OCC) released its 721-page stablecoin final rule. He called the law a cornerstone of America's position as the world's crypto capital. The American Bankers Association (ABA) responded… Read the full story on CryptoSlate Understand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Open source - CR
CryptoSlate@CryptoSlatePost on X ·
Stablecoin issuers face a 5% immediate-liquidity floor under the OCC’s final rule, down from the proposed 10%. The rule also drops a proposed insured-deposit requirement for large issuers and takes effect Jan. 18, 2027. via @pelicamatos https://t.co/H3R1iM0P5t
Open source - TB
The BlockArticle ·
American Bankers Association accuses OCC of undermining Congress with final stablecoin rewards rule The fight between banks and crypto has reignited after a top banking regulator declined to weigh in on third-party stablecoin rewards.
Open source