OCC drops proposed affiliate rewards presumption, but stablecoin yield ban stays
The Office of the Comptroller of the Currency (OCC) dropped a proposed presumption against certain stablecoin rewards routed through affiliates in its final GENIUS Act rule, while retaining the prohibition on issuers paying yield for holding stablecoins.
The final rule leaves linked issuer and third-party rewards subject to review and gives existing programs no grandfathering. The agency had delivered the rule ahead of schedule, according to Comptroller Jonathan V. Gould, who posted about it on X as @USComptroller.
For exchange-run rewards, removing the proposed test leaves the legality of individual arrangements unsettled. The change follows CryptoSlate's earlier coverage of exchange stablecoin rewards. The rule covers permitted and foreign payment stablecoin issuers within the OCC's jurisdiction and certain custody activities by OCC-supervised entities.
Rewards assessment approach
The proposal would have presumed that certain linked arrangements amounted to prohibited issuer yield, where an issuer pays interest to an affiliate who then makes payments to holders solely for holding the issuer's stablecoin. The final rule removes this presumption while retaining the statutory yield prohibition.
The agency said the proposed test could have caught permissible arrangements while suggesting that impermissible arrangements outside its triggers were acceptable. Instead, the OCC will apply the statute to the facts of each arrangement without providing a list of permitted or prohibited structures.
Requiring a rebuttal in those circumstances risked imposing burdens without a matching benefit.
No exemptions for existing programs
Rewards programs that predate the GENIUS Act will be evaluated in the same way as programs established after enactment. The regulator also declined a de minimis safe harbor for small or incidental yield payments, stating the statute contains no exemption for them.
The rule's rewards provisions apply the issuer yield prohibition equally to institutional and retail stablecoin holders. It offers no cure period for violations, though the OCC says it will exercise enforcement discretion according to the circumstances.
Implementation timeline
The rule takes effect on Jan. 18, 2027. The OCC will initially monitor arrangements through issuers' applications and ongoing supervision. Where it identifies transactions that violate or evade the yield prohibition, it says it will take action and provide additional public guidance as appropriate.
Alongside the rule, the OCC released Paperwork Reduction Act notices covering licensing and registration applications and weekly and quarterly reporting forms. The OCC anticipates that experience with these arrangements could support a later rule clarifying the yield prohibition.
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