OCC leaves stablecoin rewards open to crypto exchanges

The Office of the Comptroller of the Currency (OCC) has finalized rules for stablecoin issuers that leave crypto exchanges able to offer customers interest-like rewards, subject to case-by-case review. The distinction matters: the issuer creates the stablecoin, while an exchange can hold it for customers and pass along earnings. The OCC announced the rule on Oct. 21 as part of implementing the GENIUS Act.

Under the OCC’s final rule bulletin, the framework takes effect on Jan. 18, 2027. The Associated Press report on the rule says issuers such as Circle remain prohibited from paying interest directly to people who hold their coins, while exchanges such as Coinbase and Robinhood may pass earnings to customers as rewards.

How can an exchange pay a reward if the issuer cannot?

A payment stablecoin is designed to keep a steady value, typically around $1. The issuer backs the coins with assets such as bank deposits and U.S. Treasury securities. Those assets can earn interest. The issuer and the exchange are separate parts of the chain: the issuer creates and backs the coin; an exchange trades or holds it for a customer.

The GENIUS Act bars the issuer from paying interest to coinholders. The OCC’s final rule does not extend that blanket prohibition to every third-party exchange arrangement. An exchange may use earnings associated with stablecoins to fund customer rewards, but the arrangement can be assessed case by case. That leaves exchanges room to offer rewards without giving issuers permission to pay interest directly.

What does the OCC rule cover?

The rule implements the GENIUS Act’s framework for payment stablecoins and related activities by entities under OCC jurisdiction. It sets requirements covering reserves, redemptions, risk management, audits, reporting, custody and supervision. The OCC says the rule does not yet cover Bank Secrecy Act, anti-money-laundering or sanctions requirements; those are due in a separate rulemaking with the Treasury Department.

The law was enacted on July 18, 2025, and the OCC says its rule takes effect on Jan. 18, 2027. The agency received comments from stakeholders after publishing its proposal. For exchanges, the practical question is how a specific rewards arrangement will be judged under the final framework. The OCC’s case-by-case approach leaves that assessment to regulators.

Why have banks challenged these rewards?

Stablecoin reserves can earn interest, and rewards can give customers a reason to keep funds on a crypto platform instead of a bank. Banks have argued that this could move deposits out of the banking system and weaken a source of lending. The AP reported that Coinbase offered up to 3.5% yield on USDC balances, compared with a 0.38% average savings-account yield cited from the FDIC.

The OCC rule does not settle that dispute. It establishes issuer requirements while allowing third-party rewards to continue under case-by-case scrutiny. Customers should also distinguish those rewards from bank-account interest: crypto platforms do not provide the equivalent of federal deposit insurance, according to AP.

Sources

• OCC’s final rule bulletin — occ.gov
• Associated Press report on the rule — apnews.com