OCC leaves crypto exchange stablecoin rewards in place

The Office of the Comptroller of the Currency on Oct. 21 finalized rules for stablecoin issuers that leave crypto exchanges able to offer customers interest-like rewards, according to the Associated Press report. The decision implements the GENIUS Act and keeps a route open for platforms to pass along earnings from stablecoin reserves.

Who can pay rewards under the rule?

Stablecoin issuers such as Circle remain barred from paying interest directly to people holding their coins, the AP reported. Exchanges such as Coinbase and Robinhood can pass earnings to customers as rewards on a case-by-case basis, leaving the practice available even as banks sought tighter limits.

Stablecoins are designed to hold a steady value, commonly one U.S. dollar, and are backed by assets including bank deposits and Treasury securities. Those reserves earn interest; crypto companies have sought to share some of that return with customers holding stablecoins on their platforms.

What does the OCC rule cover?

The OCC’s final rule bulletin sets requirements for payment stablecoin issuance and related activities by entities under its jurisdiction. It covers reserves, redemptions, risk management, audits, supervision and custody, among other areas. The rule applies to OCC-regulated issuers, including certain bank subsidiaries and qualified nonbank issuers.

The distinction is between paying a holder directly as the issuer and a platform passing along earnings as a reward. The OCC said it would not define “interest” or “yield” in the rule, and will assess those terms in light of the facts and circumstances, according to the published rule.

When does the rule take effect?

The OCC says the final rule takes effect Jan. 18, 2027, the same date the GENIUS Act takes effect. The agency says it will coordinate with other regulators on the law’s remaining implementation, including separate rules covering anti-money-laundering requirements and sanctions. That leaves exchanges’ rewards programs subject to case-by-case treatment as the federal framework begins.

References

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