Existing stablecoin rewards programs will get no automatic pass under the OCC’s final GENIUS Act rule, which replaces its proposed framework with case-by-case scrutiny. The Office of the Comptroller of the Currency finalized the rule on October 21, 2026, becoming the first federal regulator to complete regulations under the law. Programs offered by Coinbase, PayPal and Kraken will need the agency’s approval.
Key takeaways
- The OCC rule takes effect on January 18, 2027.
- GENIUS bars issuer rewards based solely on stablecoin holding or use.
- Existing rewards arrangements receive no safe harbor.
- Other federal agencies are still developing their regulations.
From the OCC’s proposed rule to final GENIUS Act oversight
The final rule governs stablecoin issuers under OCC supervision, including their relationships with exchanges. It is scheduled to take effect on January 18, 2027.
The OCC supervises U.S. national banks and trusts, institutions expected to play a central role in issuing stablecoins under the law. An independent Treasury Department bureau, the agency is establishing operating requirements for firms issuing dollar-based tokens.
The payment stablecoin market is led by Tether’s USDT and Circle’s USDC. These tokens are designed to track the U.S. dollar and maintain a steady value.
Between its proposed rule and final GENIUS Act framework, the OCC also revised reserve requirements. It adopted a principles-based approach to diversification and concentration, backed by requirements for minimum daily liquidity and limits on excessive exposure to a single counterparty.
Rewards face a case-by-case legal test
The GENIUS Act prohibits issuers from paying rewards solely for holding, using or retaining payment stablecoins. The OCC indicated that rewards made partly for other reasons can fall outside that prohibition.
The distinction centers on the word “solely”. The regulator said it “will apply the language of the statute to the facts and circumstances of any particular arrangement.”
The final text also drops the proposed rule’s “rebuttable presumptions”, which had presumed that specified activities violated the restrictions. The OCC’s approach instead emphasizes examining individual arrangements under the statutory language.
The crypto industry has interpreted GENIUS as permitting certain rewards through secondary platforms. That interpretation does not give existing programs automatic regulatory approval.
Coinbase, PayPal and Kraken receive no safe harbor
Pre-existing stablecoin rewards programs must pass OCC review; their history does not establish compliance. The rule explicitly rejects the idea that congressional awareness of these arrangements amounted to endorsement.
“The OCC declines to presume that rewards programs that predated the GENIUS Act comply with the GENIUS Act,” the agency wrote.
The offerings under scrutiny include PayPal’s 4% return on PYUSD, Coinbase One’s 3.75% rewards on USDC positions and returns of up to 4.5% on USDG accounts for Kraken+ subscribers.
Bankers have argued that stablecoin rewards threaten customer deposits and lobbied for amendments through the Digital Asset Market Clarity Act. That bill failed to advance in a key Senate vote in September 2026. Bank deposits have nevertheless continued growing alongside increased interest in stablecoins.
The OCC rejected waiting for potential legislative changes: “Unless and until such legislation passes, the OCC must implement the GENIUS Act’s yield prohibition, as enacted.”
Other agencies are still writing stablecoin rules
The Treasury Department, Federal Reserve, Federal Deposit Insurance Corp. and Financial Crimes Enforcement Network are continuing related rulemaking. None of the regulators met the law’s midyear deadline.
The FDIC introduced application standards in late 2025 and proposed rules for state-chartered institutions in April 2026. Treasury followed with its proposal in August 2026.
In April 2026, FinCEN and the Office of Foreign Assets Control jointly proposed controls covering transaction blocking or freezing and compliance with the Bank Secrecy Act.
The Federal Reserve issued proposals in September 2026 for member-bank subsidiaries planning to issue stablecoins, addressing issuance procedures, capital and reserves. The OCC’s final rule is scheduled to begin operating on January 18, 2027.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.