OCC drops affiliate rewards presumption but keeps stablecoin yield ban

The Office of the Comptroller of the Currency has dropped a proposed presumption against stablecoin rewards routed through affiliates or related third parties in its final GENIUS Act rule, published on 21 October. The rule nonetheless retains the statutory prohibition on issuers paying holders interest or yield solely for holding, using or retaining a payment stablecoin. It takes effect on 18 January 2027.

The proposal would have presumed that certain linked arrangements amounted to prohibited issuer yield: an issuer paying interest or yield to an affiliate or related third party, which would in turn arrange payments to holders solely for holding, using or retaining the issuer's stablecoin. The OCC said the test could have caught permissible arrangements while suggesting that impermissible arrangements outside its triggers were acceptable, and that requiring a rebuttal in those circumstances risked imposing burdens without a matching benefit. Instead, the agency said it will apply the statute to the facts of each arrangement, and it has not published a list of permitted or prohibited rewards structures.

The OCC's anti-evasion authority remains. The rule states that an issuer cannot avoid the prohibition simply by paying an agent to make interest or yield payments on its behalf that it could not make directly. Transaction-based payments require an assessment of the particular facts, and payments that do not constitute interest or yield, or that are not made solely in connection with stablecoin holding, use or retention, fall outside the prohibition. Rewards programmes predating the GENIUS Act will be evaluated in the same way as those established after enactment. The regulator also declined a de minimis safe harbour for small or incidental yield payments, saying the statute contains no exemption for them.

The rewards provisions apply the issuer yield prohibition equally to institutional and retail holders, and the rule offers no cure period for violations, although the OCC says it will exercise enforcement discretion according to the circumstances. The agency said it will initially monitor arrangements through issuers' applications and ongoing supervision, and will take action and provide further public guidance where it identifies transactions that violate or evade the prohibition. It anticipates that experience with these arrangements could support a later rule clarifying the yield prohibition.

The rule covers permitted and foreign payment stablecoin issuers within the OCC's jurisdiction and certain custody activities by OCC-supervised entities. Comptroller Jonathan V. Gould, posting on X as @USComptroller, said the agency had delivered the final rule ahead of schedule. The OCC said GENIUS Act rules on the Bank Secrecy Act, anti-money laundering and sanctions will be addressed in separate rulemaking coordinated with Treasury. Alongside the rule it released Paperwork Reduction Act notices covering licensing and registration applications and weekly and quarterly reporting forms, each with a comment deadline 30 days after Federal Register publication. The 18 January effective date is separate from the opening of applications; the OCC said a further news release will specify when it begins accepting and processing prospective issuers' applications and waiver requests.