OCC leaves stablecoin rewards open to crypto exchanges

The Office of the Comptroller of the Currency (OCC) finalized rules on Oct. 21 that bar stablecoin issuers from paying holders interest but leave reward programs run by crypto exchanges for case-by-case review. The distinction lets platforms such as Coinbase and Robinhood continue to offer interest-like rewards, according to The Associated Press’s report on the rule. The rules implement the GENIUS Act, the federal stablecoin law enacted in 2025, and take effect Jan. 18, 2027.

How can an exchange pay rewards if issuers cannot pay interest?

A stablecoin issuer creates the token and holds assets intended to support its value. Those reserves can include bank deposits and U.S. Treasuries, which earn interest. An exchange holds or trades the stablecoin for customers. The issuer cannot pay the holder interest directly, but a platform may pass along earnings connected to those reserves as a customer reward.

The legal question is whether the platform’s payment is effectively interest on the stablecoin. The OCC’s final rule does not impose a blanket ban on third-party arrangements. Instead, the agency will assess them case by case, based on the facts and circumstances. The OCC’s rule says a payment through an intermediary may be tied solely to holding, using or retaining a stablecoin, or may be made at least partly for other reasons, Banking Dive reported, citing the rule.

What did the OCC’s rule settle?

It confirms that issuers may not pay interest directly to stablecoin holders under the GENIUS Act, while leaving some exchange reward arrangements possible. That is a narrower decision than the banking groups sought: they had pushed for limits on platforms using third-party arrangements to provide returns. The OCC did not define a single test that automatically approves or rejects every reward program.

That leaves the structure of each program important. A payment tied only to holding a stablecoin may face a different assessment from one connected to other activity. The OCC also says transaction-based payments that are not interest or yield, or are not made solely because a customer holds, uses or retains a payment stablecoin, are not prohibited.

Why are banks challenging the approach?

Banks argue that crypto platforms offering returns could draw deposits away from lenders and reduce their capacity to make loans. The American Bankers Association said the OCC decision threatens funds banks use to lend. For customers, the products may resemble bank savings rewards, but stablecoin holdings do not carry the Federal Deposit Insurance Corporation’s deposit insurance, AP reported.

The rule sets standards for issuers’ reserves, redemptions and risk management, alongside custody requirements for some OCC-supervised entities. It does not resolve every question about rewards: the OCC says it will monitor how the industry develops and may adjust its framework. For now, issuers face a direct prohibition on interest, while exchanges’ rewards remain subject to regulatory review.

Source material

• The Associated Press’s report on the rule — apnews.com
• Banking Dive reported, citing the rule — bankingdive.com