OCC issues first federal rule implementing the GENIUS Act's stablecoin yield ban

The Office of the Comptroller of the Currency (OCC), an independent bureau of the U.S. Treasury Department, issued a final rule on Wednesday implementing the GENIUS Act's framework for dollar-based stablecoin issuers — the first final rule from any federal banking regulator under the Act since it passed. The rule governs how stablecoin issuers manage reserves, structure custody arrangements, and work with third-party exchanges, and takes effect January 18, 2027.

The centerpiece of the rule is the OCC's approach to the GENIUS Act's ban on stablecoin issuers paying customers "solely in connection with the holding, use, or retention" of a stablecoin — language that was written broadly enough that the statute itself never defines which specific practices cross the line. Exchanges including Coinbase, PayPal, and Kraken currently offer stablecoin rewards programs that the crypto industry has operated under the assumption were permitted. The OCC's rule does not extend any safe harbor to those existing programs and explicitly states the agency will not presume they comply with the law.

Instead, the OCC said it will evaluate reward programs case by case, suggesting that a reward "made, at least in part, for other reasons" beyond simply holding the stablecoin could fall outside the ban — a standard that leaves exchanges with real uncertainty about which existing programs survive scrutiny. The agency also removed an earlier set of "rebuttable presumptions" it had floated about which activities would automatically be treated as violations, opting instead for the more open-ended case-by-case standard.

The rule lands in the middle of an active lobbying fight. Traditional bankers have pushed regulators to shut down stablecoin rewards programs, viewing them as a direct competitive threat to bank deposits, since a yield-bearing stablecoin offers consumers an alternative to a savings account. The crypto industry, meanwhile, backed the Digital Asset Market Clarity Act, legislation that would have amended the GENIUS Act to explicitly permit these rewards — but that bill failed to advance past a key Senate vote last month. The OCC was explicit about the consequence: "unless and until such legislation passes," the agency said, it is obligated to implement the yield prohibition as Congress enacted it, not as the industry would prefer it.

On reserve requirements, the OCC moved away from a rigid checklist toward a principles-based approach, requiring issuers to maintain diversification and avoid excessive concentration in reserve holdings alongside a minimum daily liquidity requirement — giving issuers more flexibility in how they structure reserves as long as they meet the underlying safety standard.

Treasury Secretary Scott Bessent praised the rule publicly, and OCC officials framed it as creating new opportunities for banks, including community banks, to enter the stablecoin issuance business under a clear federal framework. The OCC is just one of several regulators working through GENIUS Act implementation: the FDIC, the Federal Reserve, and Treasury units including FinCEN and the Office of Foreign Assets Control all have related rulemakings in progress. None of those agencies met the Act's original mid-year deadline, and some of their rules may not be finalized before the OCC's rule takes effect in January, according to CoinDesk, which first reported the details of the rule.