OCC leaves stablecoin rewards open to crypto exchanges

Can crypto platforms keep paying rewards on stablecoin balances? Yes: the Office of the Comptroller of the Currency’s final rule leaves exchanges able to pass earnings to customers on a case-by-case basis, while banning stablecoin issuers from paying holders interest directly. The Associated Press report says this preserves reward programs at platforms such as Coinbase and Robinhood. The OCC published its rule on October 21 to implement the GENIUS Act.

Who can pay rewards under the rule?

The distinction is between an issuer and a platform that holds or trades stablecoins. Circle, which issues USDC, remains barred from paying interest to people who hold its coins; exchanges can pass along earnings from those coins as rewards. The OCC’s final rule bulletin sets requirements for payment stablecoin issuance and related activities under its jurisdiction, and takes effect on January 18, 2027.

That leaves room for exchange rewards, rather than a blanket permission for every program. The AP reports that platforms may pass earnings to customers case by case. In practice, the rule preserves a route for yields funded by interest earned on the reserves backing stablecoins, while keeping direct issuer payments off limits.

Why did banks want tighter limits?

Stablecoin reserves can include bank deposits and U.S. Treasuries, which earn interest. Crypto platforms can use that income to offer customers a return, creating competition with bank savings accounts. The AP reported Coinbase yields of up to 3.5% on USDC balances, compared with a 0.38% average savings account yield in the latest Federal Deposit Insurance Corp. figures cited in its report.

Banking groups warn that customers moving funds to stablecoins could reduce banks’ deposits and, in turn, their capacity to lend. The American Bankers Association said the OCC decision threatens funds banks use to make loans, according to the AP. The next date to watch is January 18, 2027, when the final rule takes effect.

References

• Associated Press report — apnews.com
• final rule bulletin — occ.gov