A final stablecoin rule has not ended the argument over rewards. The Bank Policy Institute used its October 24 newsletter to renew criticism of how the Office of the Comptroller of the Currency will judge arrangements that pay stablecoin holders through third parties.

TL;DR

• BPI says case-by-case decisions leave stablecoin reward arrangements unclear.
• The dispute concerns implementation of the issuer yield prohibition.
• The OCC says its broader GENIUS Act rule takes effect January 18, 2027.

The disagreement is about how the prohibition is applied

In the newsletter, BPI repeated its October 21 response to the final rule. The banking trade group objects to removal of a proposed presumption covering certain issuer arrangements with third parties. It says the replacement approach lacks a clear process for explaining decisions and making outcomes public.

This is a lobbying position from an organization representing banks. Its concern about deposits moving into stablecoins is a forecast about competitive and financial effects, rather than evidence that the newly finalized rule has already caused a measurable outflow.

The OCC’s announcement presents the rule as a framework covering reserve backing, redemption and risk management. It confirms the January effective date and says separate work will address anti-money-laundering and sanctions requirements. BPI’s criticism addresses one part of that wider framework.

The practical distinction is between a payment token’s reserve income and a customer incentive offered elsewhere in its distribution chain. Identifying who pays, who ultimately funds the payment and what behavior earns it can matter more than whether a product calls the transfer a reward, rebate or yield.

Product design now has a regulatory interpretation problem

Consider two hypothetical offers: a payment app discounts a purchase, while another pays a recurring amount for keeping tokens idle. Both benefit the user, but their commercial purpose, funding and connection to the issuer may differ. Their labels alone cannot establish their treatment under the rule.

That is why published reasoning would be useful beyond the banks lobbying for it. A decision about one arrangement can help other providers understand which features the regulator regarded as decisive. Without that detail, firms may struggle to compare their own structures with earlier cases.

The product boundaries are already becoming more complex. SoFi’s tokenized-deposit plan raises a different set of claims from a payment stablecoin, even when conversion makes the customer experience look continuous.

Meanwhile, stablecoin payment activity measures how tokens are used, not whether an incentive is legally permissible. Operational activity cannot answer the policy question by itself.

The scrutiny of transaction purpose also connects with wallet and financial-crime controls: the institution still needs to understand the economic relationship behind the transfer. For the OCC dispute, the next useful evidence will be supervisory guidance and disclosed decisions, rather than competing descriptions of what the rule should mean.

Written by the News Desk and edited by Samuel Rae.

Bitcoin Magazine

OCC Finalizes GENIUS Act Stablecoin Rules, Leaves Rewards Fight Open

The Office of the Comptroller of the Currency on Wednesday finalized its rules implementing the GENIUS Act, becoming the first federal regulator to complete the stablecoin framework Congress passed in July 2025. The rule takes effect January 18, 2027.

The rules set federal standards for payment stablecoin issuers covering reserve backing, redemptions, capital, custody, audits and risk management. It establishes a licensing and supervisory regime for national banks, their subsidiaries, nonbank companies and foreign issuers that fall under OCC jurisdiction.

“We are providing a clear, practical framework for payment stablecoin innovation, with strong standards for reserve backing, redemption, and risk management,” Comptroller Jonathan Gould said in a statement. He described the rule as advancing “President Trump and Secretary Bessent’s vision for American leadership in digital assets.”

The GENIUS Act, passed and signed into law last year, was the first federal statute to govern stablecoins, the dollar-pegged tokens that serve as the main trading pair for bitcoin on most exchanges. 

The law required one-to-one reserve backing and annual audits and directed bank regulators to write the implementing rules. The Federal Reserve and FDIC have issued proposals. Treasury is drafting its own.

Rewards fight left unresolved

The most consequential change from an earlier February proposal is what the agency took out.

The GENIUS Act bans issuers from paying interest or yield to stablecoin holders. It does not address exchanges and other third parties that offer rewards on stablecoin balances. Banking groups have labeled this the “stablecoin loophole” and lobbied for months to close it, arguing that yield on tokens could drain deposits and weaken lending.

The proposed rule would have treated certain arrangements between issuers and third parties as presumed violations of the ban. The final rule drops that presumption in favor of case-by-case review.

“We will just let the market develop and address it as it comes,” an OCC official told reporters, declining to say whether existing exchange rewards programs comply with the rule while noting the agency has authority to pursue clear evasions of the ban, according to Crypto in America.

The decision is a setback for banks, which had turned to the OCC after the Clarity Act, the broader crypto market structure bill, failed a Senate procedural vote in September. Stablecoin yield was one of the central sticking points in those negotiations.

Stablecoin issuers get some flexibility on reserves

The final rule eases several proposed restrictions on reserve management. It scraps a 20-day weighted-average maturity limit on reserve assets, allowing issuers to hold longer-dated Treasuries. Issuers may withdraw surplus reserves at any time rather than once a month, provided outstanding stablecoins remain backed one-to-one. 

On redemptions, the agency removed a provision that would have extended deadlines during a surge in withdrawal requests. Issuers must instead notify the OCC within 24 hours if redemption requests exceed 10% of a stablecoin’s outstanding value in a single day, according to Crypto in America.

The OCC has yet to announce when it will accept applications from prospective issuers. Anti-money laundering and sanctions rules will come in a separate rulemaking with the Treasury.

This post OCC Finalizes GENIUS Act Stablecoin Rules, Leaves Rewards Fight Open first appeared on Bitcoin Magazine and is written by Micah Zimmerman.