OCC leaves stablecoin rewards open to crypto exchanges

The Office of the Comptroller of the Currency (OCC) issued a final rule on Oct. 21 that bars stablecoin issuers from paying holders interest directly but leaves crypto exchanges able to offer interest-like rewards case by case. The decision implements the GENIUS Act and preserves a way for platforms to share earnings tied to stablecoin reserves with customers.

The Associated Press report describes the distinction: issuers such as Circle cannot pay holders for keeping their coins, while exchanges such as Coinbase and Robinhood may pass earnings to customers as rewards. The OCC’s final rule bulletin says the rule takes effect Jan. 18, 2027.

How does the reward move from a stablecoin to a customer?

A stablecoin is designed to hold a steady value, often one U.S. dollar. Its issuer backs the coins with assets such as bank deposits and U.S. Treasury securities. Those reserves can earn interest. An exchange that holds or trades the stablecoin can then offer some earnings to customers as a reward.

The rule draws a line between the issuer and the exchange. The issuer cannot pay a holder solely for holding the coin. The exchange’s reward arrangement can be considered on its own facts. That leaves room for a platform to share earnings without making the reward an automatic payment from the issuer to every coin holder. It is similar to a shop offering a bonus through its own loyalty program: the customer may benefit from the same underlying activity, but the payment comes through a different party.

What does “case by case” mean for exchanges?

It means the rule does not grant blanket approval to every reward program. The OCC says exchange arrangements may continue to be evaluated individually. The final rule applies to stablecoin issuers and certain related activities under OCC jurisdiction; the agency says other GENIUS Act requirements, including anti-money-laundering rules, will be addressed separately.

The distinction matters because the GENIUS Act prohibits issuers from paying interest or yield to holders, while platforms may have a separate role in distributing returns. The OCC’s rule puts that boundary into its implementation framework. It does not promise that every platform program will qualify.

Why were banks seeking tighter limits?

Banking groups have warned that customers could move savings from bank accounts into stablecoins if crypto platforms offer higher yields. Banks say lost deposits could reduce the funds available for lending. The American Bankers Association said the OCC decision threatens funds banks use to make loans, according to AP.

For customers, a reward can resemble bank interest, but it does not make a crypto platform a bank account. AP reported that crypto balances do not have an equivalent to Federal Deposit Insurance Corp. deposit insurance. The rule keeps the reward option open while leaving the issuer’s direct-payment ban in place.

Sources

• Associated Press report — apnews.com
• final rule bulletin — occ.gov