OCC Updates Rule: Weigh Stablecoins Against GENIUS Act Ban

OCC final rule resets review of stablecoin rewards as GENIUS Act yield ban takes shape

The U.S. Office of the Comptroller of the Currency (OCC) has issued a final rule implementing parts of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, becoming the first federal banking regulator to finalize regulations under the new stablecoin law.

A key flashpoint is how the OCC will treat stablecoin rewards programs that have become common on crypto platforms, even as the GENIUS Act broadly prohibits stablecoin issuers from paying interest or yield “solely” for holding, using, or retaining a payment stablecoin.

In the final rule, the OCC said it will not assume that rewards programs that existed before the GENIUS Act are compliant. “The OCC declines to presume that rewards programs that predated the GENIUS Act comply with the GENIUS Act,” the agency wrote, adding that congressional awareness of such programs “does not necessarily imply that Congress endorsed them as permissible.”

The OCC’s stance means exchanges and other firms that have offered stablecoin-related rewards will need to clear existing programs through the regulator rather than rely on grandfathering. The rule also indicates the OCC is not offering special treatment for pre-existing programs as it evaluates which offerings pass regulatory muster.

Rewards tied to stablecoin use are widespread. Examples cited in the rulemaking context include PayPal’s stated 4% return for users of PYUSD, Coinbase One’s 3.75% on USDC positions, and Kraken+ subscriber rewards that can reach 4.5% on USDG accounts.

While the GENIUS Act’s yield ban is central to the debate, the final rule does not lay out extensive detail on precisely what activities would fall under the prohibition. The crypto industry has generally interpreted the law as leaving room for certain exchange-based rewards programs, even if stablecoin issuers themselves face a clear statutory limit.

The OCC’s rule is part of a broader multi-agency effort. The GENIUS Act directs several regulators—including the FDIC, Federal Reserve, NCUA, OCC, Treasury Department, and state regulators—to issue implementing regulations, many of which are due within one year of the statute’s enactment.

The law’s effective date is set for the earlier of 18 months after enactment or 120 days after primary regulators finalize implementing rules. Separately, digital asset service providers such as exchanges and custodians may continue offering and selling stablecoins that are not issued by “permitted” issuers for up to three years after enactment.

The OCC’s framework also addresses the licensing path for entities that want to become OCC-supervised stablecoin issuers and includes transition tools, such as the possibility of temporary waivers for applicants whose applications are substantially complete as of the law’s effective date.

The stablecoin rewards question may also intersect with other legislative activity. The information accompanying the rulemaking notes that, if enacted, the CLARITY Act could supersede the OCC’s approach to resolving how rewards should be treated under federal law.

For the market, the OCC’s final rule is an early signal of how federal banking regulators may apply the GENIUS Act in practice: by requiring formal review of popular rewards structures and declining to treat existing stablecoin incentive programs as automatically acceptable under the new regime.