OCC rule leaves room for crypto firms’ stablecoin rewards

The Office of the Comptroller of the Currency (OCC) finalized stablecoin rules that leave room for crypto platforms to offer customers interest-like rewards, a key point in a fight over whether stablecoins could pull savings away from banks. The Federal Register’s published OCC rule appeared on Oct. 23. It implements parts of the GENIUS Act, the U.S. law that sets rules for payment stablecoins, and takes effect Jan. 18, 2027. The Associated Press reported on the ruling and its effect on crypto rewards.

Does the rule let stablecoin issuers pay interest?

No. The rule keeps the ban on permitted payment stablecoin issuers paying holders interest or yield solely for holding, using or keeping their coins. Stablecoins are digital tokens designed to hold a steady value, often $1. The issuers’ reserves can include bank deposits and U.S. Treasuries, which earn interest.

The OCC had proposed a rule that presumed certain issuer payments through affiliates or other related companies broke the ban. In the final rule, the agency removed that presumption. It also declined to define “interest” or “yield,” saying it will assess them under the law and the facts of each case.

Can exchanges still offer rewards?

They may be able to. The OCC says a payment is not banned if it is not interest or yield, or is not made solely because someone holds, uses or keeps a stablecoin. Whether a particular reward meets those tests depends on its details, the rule says.

The AP reported that exchanges such as Coinbase and Robinhood can pass earnings from stablecoins on to customers in rewards, subject to case-by-case review. That leaves platforms room to continue some programs, but the rule does not give every reward program blanket approval. The OCC says it can still act if an issuer uses another party to evade the issuer-payment ban.

Why are banks concerned about the decision?

Banks have argued that crypto rewards could draw deposits away from them, leaving less money available for lending. The OCC rule does not settle that dispute. The AP reported that the American Bankers Association said the decision threatens funds banks use to make loans.

Consumer advocates have also raised concerns. Crypto holdings do not have the same federal deposit insurance that protects eligible bank deposits. The OCC’s final rule sets out how it will assess stablecoin issuers under the new law; the rewards question will turn on how each arrangement works.

Sources

• Federal Register’s published OCC rule — federalregister.gov
• reported on the ruling and its effect on crypto rewards — apnews.com