In brief
- The OCC proposed rules that would restrict certain stablecoin rewards programs under the GENIUS Act.
- The language could affect Coinbase’s USDC rewards arrangement with Circle, some industry experts said.
- But the rules are changeable, and not final, and others believe they won’t outlaw top stablecoin rewards programs.
A key Treasury Department bureau released preliminary rules this week detailing how it will implement the stablecoin-focused GENIUS Act—and industry experts are split about whether the proposal could impact America’s top stablecoin rewards program.
On Thursday, the Office of the Comptroller of the Currency, the nation’s top banking regulator, released a massive, 376-page proposed rulemaking detailing how it intends to implement the GENIUS Act, which was signed into law by President Donald Trump last summer.
Among the proposed rules—which are subject to a 60-day public comment period—are multiple sections prohibiting certain types of stablecoin rewards. The prohibitions appear to outlaw certain arrangements between stablecoin issuers and third parties in which the third parties pass yield onto stablecoin holders in connection with their “holding, use, or retention” of the tokens.
That sounds not so far from the current arrangement between USDC issuer Circle and Coinbase. Both companies share revenue from the yield generated on USDC’s reserves, and Coinbase currently offers users roughly 4% yield, essentially a type of interest payment, on their USDC deposits.
Multiple crypto policy leaders told Decrypt they think the OCC’s proposed language could impact Coinbase’s current USDC rewards program, but emphasized the complexity of the proposed rule and the possibility that it could be worked around.
One of the policy leaders said Coinbase was likely always going to need to adjust its USDC rewards program at least somewhat after the implementation of the GENIUS Act. Coinbase did not immediately respond to Decrypt’s request for comment on this story.
Last year, Coinbase reported $1.3 billion in stablecoin revenue. The company cited its USDC rewards program as its key growth driver in 2025.
Some crypto executives have denounced the OCC’s proposed rulemaking, deeming it regressive.
Scott Johnsson, a finance lawyer and crypto-focused venture capitalist, toldDecrypt he thinks the language “most likely does” impact Coinbase’s USDC rewards program. But he also expects the rule will be challenged, and changed.
But others have taken a different tune. Circle’s head of global policy, notably, commended the OCC on its proposed regulations—a sentiment echoed by Circle’s CEO, Jeremy Allaire.
“This is all part of accelerating U.S. leadership in transforming the economic and financial system and rebuilding it natively on the internet,” Allaire said.
Perhaps underscoring the possibility that Coinbase and Circle needn’t worry too much about the proposed rules, a banking industry source told Decrypt that the OCC’s announcement does not give them much comfort. The banking lobby has been pushing for months to restrict stablecoin rewards, which it worries could siphon customers away from traditional, low-yield bank accounts.
“It really doesn’t solve the problem,” the banking industry source said, alluding to potential loopholes in the OCC’s proposed restrictions. The source emphasized that rulemakings “can always be changed.”
The banking industry would rather have restrictions on stablecoin yield permanently enshrined in law, the source said. For over a month, banking and crypto representatives have gone back and forth negotiating the issue of stablecoin yield, as part of negotiations on crypto’s stalled market structure bill. The meetings, led by the White House, were intended to arrive at a deal by this weekend—but a deal is unlikely to materialize so soon, Decrypt reported earlier Friday.
“This doesn’t fix the debate,” Todd Phillips, a law professor at Georgia State focused on bank regulation, said of the OCC’s proposed rules. “This is not going to satisfy the two warring sides.”
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