OCC Issues First Final Rule Under GENIUS Act, Says Existing Stablecoin Rewards Must Be Reviewed

OCC becomes first regulator to finalize GENIUS Act rules

The U.S. Office of the Comptroller of the Currency (OCC), the agency that oversees national banks and trusts, issued a final rule on Wednesday to put the GENIUS Act into practice. It is the first federal banking regulator to complete a final rule under the law.

The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act sets rules for stablecoins — crypto tokens designed to hold a steady value tied to the U.S. dollar. The OCC's rule covers the full process for regulated firms and foreign companies to issue stablecoins in the U.S., and how firms hold them in custody.

The rule is set to take effect on January 18.

Key points from the final rule

• The OCC's rule says rewards programs that existed before the GENIUS Act will not get special treatment as the agency decides which ones are allowed.
• The agency declined to give examples of which rewards activities may break the law's ban.
• The OCC said it changed its reserve requirements from the earlier proposal, using a "principles-based approach" to reserve asset diversification and concentration.
• Implementation is not finished: the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. still have rulemakings in progress.

What the rule says about stablecoin rewards

The GENIUS Act bans payments made to customers "solely in connection with the holding, use, or retention of such payment stablecoin." The OCC has not offered examples or illustrations of which rewards operations may break that ban.

In the rule document, the agency said it "will apply the language of the statute to the facts and circumstances of any particular arrangement." It also suggested that the word "solely" carries a lot of weight, meaning a reward that "might be made, at least in part, for other reasons" would fall outside the GENIUS Act's ban.

The rule states: "The OCC declines to presume that rewards programs that predated the GENIUS Act comply with the GENIUS Act. The fact that Congress may have had notice of these rewards programs does not necessarily imply that Congress endorsed them as permissible." The OCC also removed what it had called "rebuttable presumptions" that assumed certain activities would violate the rule.

The agency has declined to provide safe harbors for existing programs, so the industry will have to test the OCC's case-by-case oversight, according to the report.

Treasury secretary backs the rule

Treasury Secretary Scott Bessent said in a statement: "The OCC's final rule carries that landmark legislation forward, providing a clear, practical foundation for private-sector innovation, competition, and American leadership in digital assets."

Existing rewards programs and the debate behind them

Several financial firms run rewards programs tied to stablecoins, similar to incentives offered by credit card providers. According to the report, some of the highest rates are offered by PayPal and Kraken, and U.S. exchange Coinbase also has a well-established program. The report lists PayPal offering a 4% return for users of its PYUSD, Coinbase One giving 3.75% on USDC positions, and Kraken+ subscribers earning as much as 4.5% on USDG accounts.

Bankers have called these programs a competitive threat to customer deposits and lobbied for changes to the GENIUS Act through the later Digital Asset Market Clarity Act. That effort did not succeed: the Clarity Act failed to advance in a key Senate vote last month without unanimous Republican support. The report says bank deposits have continued to grow since interest in stablecoins increased.

The OCC rule noted that many commenters said the agency should consider that the Clarity Act may still change GENIUS on this point. The regulator responded: "Unless and until such legislation passes, the OCC must implement the GENIUS Act's yield prohibition, as enacted."

What other agencies are still working on

The GENIUS Act called for a mid-year deadline that none of the regulators met, according to the report. Other agencies still have work underway:

• The FDIC issued application standards late last year and, in April, proposed its approach for regulating state-chartered institutions.
• The Treasury Department proposed its handling of the law in August. That followed a joint April proposal from Treasury's Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) on controls stablecoin businesses would need, including the ability to stop or freeze transactions and compliance with the Bank Secrecy Act.
• The Fed issued proposals last month for member banks' subsidiaries that plan to issue stablecoins, covering issuing procedures and standards for capital and reserves.

The report says it is unlikely all required rules will be in place before January, based on comment periods still open at the other agencies.

What is confirmed

• The OCC issued a final rule under the GENIUS Act on Wednesday, the first final rule from a federal banking regulator.
• The rule takes effect January 18 and covers stablecoin issuance and custody.
• The OCC will not treat pre-existing rewards programs as automatically compliant and removed the rebuttable presumptions from its proposal.
• The OCC changed its reserve requirements to a principles-based approach on diversification and concentration.
• Other agencies, including Treasury, the Fed and the FDIC, have rulemakings still in progress.

What is still unclear

The OCC has not given examples of which rewards operations may violate the GENIUS Act's ban. The industry will have to rely on the agency's case-by-case reviews to understand how the rule is applied, and the report says it is unlikely all required rules will be in place before January.

Why it matters

Stablecoin issuers and the exchanges where the tokens change hands will operate under the OCC's rule from January 18. Existing rewards programs are not guaranteed to be allowed, so firms that offer them will need the agency's approval. The rule also leaves open questions about how the law's ban on issuer payments will be enforced.

What happens next

The OCC rule is scheduled to go live on January 18. Treasury, the Fed and the FDIC continue work on their own rules, and several of those efforts are still in public comment periods.

Sources

• CoinDesk

Read also: OCC finalizes GENIUS Act stablecoin rules, effective January 2027