Stablecoins: OCC finalizes GENIUS Act rule, rewards battle remains open
On October 21, the OCC, the U.S. banking regulator, finalized its rule implementing the GENIUS Act. It takes effect on January 18, 2027, and covers reserves, redemption, capital, custody, audits, and risk management for payment stablecoin issuers. This is the first final rule issued under the Act.
The hot issue: rewards
→ The Act prohibits an issuer from paying interest or yield to holders simply because they hold or use the token
→ It says nothing about rewards paid by third-party platforms. The OCC dropped its presumption that some of these arrangements violate the prohibition: they will be assessed on a case-by-case basis
→ The OCC does not presume that programs predating the Act are compliant (CCN, Crypto Times)
The reactions
→ Banks (ABA) call it a loophole that could lead to deposit outflows. A TD Cowen analyst sees it as a setback for them
→ Circle welcomes clear rules
Another change: the rule removes a proposed restriction on longer-term Treasury securities held as reserves.
My analysis: the rule clarifies the framework for issuers, but leaves the decision on rewards to the first cases reviewed before January. This is a hypothesis, not a forecast.
This is not investment or legal advice.
In your view, should stablecoin rewards be allowed on platforms, or restricted to protect bank deposits? #KOSPISinks3.52%ToLowestCloseSinceApril
On October 21, the OCC, the U.S. banking regulator, finalized its rule implementing the GENIUS Act. It takes effect on January 18, 2027, and covers reserves, redemption, capital, custody, audits, and risk management for payment stablecoin issuers. This is the first final rule issued under the Act.
The hot issue: rewards
→ The Act prohibits an issuer from paying interest or yield to holders simply because they hold or use the token
→ It says nothing about rewards paid by third-party platforms. The OCC dropped its presumption that some of these arrangements violate the prohibition: they will be assessed on a case-by-case basis
→ The OCC does not presume that programs predating the Act are compliant (CCN, Crypto Times)
The reactions
→ Banks (ABA) call it a loophole that could lead to deposit outflows. A TD Cowen analyst sees it as a setback for them
→ Circle welcomes clear rules
Another change: the rule removes a proposed restriction on longer-term Treasury securities held as reserves.
My analysis: the rule clarifies the framework for issuers, but leaves the decision on rewards to the first cases reviewed before January. This is a hypothesis, not a forecast.
This is not investment or legal advice.
In your view, should stablecoin rewards be allowed on platforms, or restricted to protect bank deposits? #KOSPISinks3.52%ToLowestCloseSinceApril