The OCC’s Proposed Stablecoin Rules Under GENIUS Act Raise Concerns for Crypto Platforms and Rewards Programs

The Office of the Comptroller of the Currency (OCC) has released a comprehensive notice of proposed rulemaking to carry out the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, enacted in July 2025. This 376-page document outlines supervisory standards for permitted payment stablecoin issuers under OCC jurisdiction, covering reserve requirements, risk management, custody practices, capital thresholds, and operational safeguards.

A central point of contention involves the GENIUS Act’s existing prohibition on issuers paying interest or yield directly to holders simply for holding or using the stablecoin. The OCC’s proposal goes further by establishing a rebuttable presumption that certain arrangements with affiliates or third parties could violate this ban. Specifically, it targets close financial relationships where yield or rewards might flow to holders indirectly through intermediaries, potentially aiming to prevent evasion of the statutory restriction.

This aspect draws particular attention because many crypto platforms, including major exchanges, currently offer rewards or incentives tied to stablecoin holdings—such as through partnerships with issuers like Circle. Industry observers note that the proposed language creates uncertainty around whether these third-party programs remain viable, prompting close review by legal experts and lobbyists.

Experts point out flexibility in the draft. For instance, Todd Phillips, a former FDIC attorney and digital assets policy analyst, described the wording as leaving “some play in the joints,” suggesting it does not outright eliminate all forms of stablecoin incentives but instead invites debate on scope. The OCC emphasizes that issuers could provide evidence to rebut presumptions of improper payments.

The timing aligns with ongoing Capitol Hill discussions around broader digital asset legislation, including the Digital Asset Market Clarity Act. Stablecoin incentives have emerged as a flashpoint, with traditional banking groups expressing worries about potential shifts in customer deposits, while crypto advocates maintain that third-party offerings align with the GENIUS Act’s framework and support innovation.

During a recent Senate Banking Committee hearing, OCC Comptroller Jonathan Gould—previously Bitfury’s chief legal officer and a noted crypto supporter—fielded questions on these topics amid his testimony on oversight matters. Gould highlighted the agency’s aim to enable safe, sound growth in the stablecoin space.

The proposal includes other elements, such as a $5 million minimum capital floor for new stablecoin issuers and enhanced standards for reserve assets (primarily high-quality, liquid holdings like U.S. dollars or short-term Treasuries). It opens a 60-day public comment period following Federal Register publication, allowing stakeholders to submit feedback before any final rule.

No immediate statements have emerged from affected platforms like Coinbase regarding the draft. Industry sources indicate strong pushback is likely during the comment phase, even as negotiations continue on companion legislation. Democratic senators have stressed addressing community bank concerns and broader issues like potential conflicts in high-level government involvement with digital assets.

Overall, the OCC’s move represents an early step in fleshing out federal oversight for payment stablecoins, balancing innovation with prudential controls while spotlighting ongoing tensions in U.S. crypto policy development. The rulemaking process could extend over months, influencing how stablecoins integrate into the broader financial system.