TLDR
- OCC moves to ban stablecoin yield under GENIUS, with 60-day comments open
- Proposal targets indirect rewards too, presuming affiliate-linked yield breaks rules
- Merchants can discount; whitelabel partners can share profits—no holder yield allowed
- No-yield baseline could reshape CLARITY Act talks and sideline reward stablecoins
- Wider oversight covers U.S.-facing foreign issuers; rules aim for rollout by Jan 2027
The OCC released a sweeping proposal that aims to enforce the GENIUS Act and end stablecoin yield across supervised issuers. The proposal establishes strict operational rules and sets a 60-day window for public comments. Moreover, it creates a decisive regulatory shift that draws a sharp line between compliant issuers and yield products.
OCC Proposal Sets Strict Framework for GENIUS Act Enforcement
The OCC outlined detailed requirements that define how permitted payment stablecoin issuers must operate under federal oversight. The proposal prohibits issuers from paying any yield connected to the holding or use of payment stablecoins. Additionally, it introduces a presumption that indirect yield structures may violate GENIUS requirements.
The OCC said issuers must demonstrate compliance if affiliates or related entities issue rewards tied to stablecoin balances. The agency warned that such arrangements may signal attempts to avoid statutory limits. Furthermore, issuers must submit written documentation to challenge these presumptions.
The framework includes two carve-outs that clarify merchant and partner activities. Merchants may offer independent discounts for stablecoin use, and issuers may share profits with non-affiliated partners in whitelabel programs. However, these allowances cannot create yield for stablecoin holders.
Impact on CLARITY Act Debate and Stablecoin Reward Models
The OCC proposal directly affects ongoing debate surrounding the Digital Asset Market Clarity Act of 2025. The banking framework sets a no-yield baseline for GENIUS-compliant issuers, which establishes clear regulatory expectations. The proposal could shift discussions around reward-based stablecoin programs.
The restrictions contradict arguments from firms that want to offer regulated yield on stablecoin balances. These firms have urged lawmakers to preserve optional reward structures within national frameworks. Yet the OCC proposal pushes these models outside the GENIUS perimeter.
The proposal therefore separates yield products from federally supervised payment stablecoins. This distinction places yield programs under alternative regulatory pathways. It also signals that compliant stablecoins must operate without financial incentives tied to user balances.
OCC Expands Oversight Scope and Defines Operational Obligations
The OCC plans to supervise national bank subsidiaries, federal qualified issuers, state qualified issuers, and certain foreign issuers. This expansion brings offshore entities into the oversight perimeter when they access U.S. users. The proposal strengthens the federal role in monitoring cross-border stablecoin activity.
The draft rule sets requirements for reserve assets, redemption obligations, liquidity practices, audits, and custody operations. It also introduces application pathways and capital backstops to enhance stability. Existing capital adequacy and enforcement rules would be amended to align with GENIUS.
The OCC expects the new framework to take effect no later than January 2027. However, implementation could begin sooner if final rules arrive before the statutory deadline. The agency said Bank Secrecy Act and sanctions measures will follow in a separate process.
