The American Bankers Association has accused the Office of the Comptroller of the Currency (OCC) of undermining Congress after the banking regulator declined to restrict rewards offered by third-party stablecoin platforms.
The Treasury Department’s OCC published its final rule on Wednesday to implement the GENIUS stablecoin act, which became law last year. The regulation differs from the initial proposal over the treatment of stablecoin rewards, through which users can earn interest on deposited funds.
The GENIUS Act prevents stablecoin issuers from paying interest directly. However, it has remained unclear whether third-party platforms, including Coinbase, can provide such rewards. The question was heavily disputed during negotiations over a wider cryptocurrency bill, the Clarity Act, which has so far failed to advance in the Senate.
The OCC’s proposed rule adopted the Act’s ban on direct payments by issuers. It also introduced a presumption that some arrangements could be unlawful where issuers had particular business relationships with third parties.
That presumption has been removed from the final rule, leaving crypto platforms able to continue offering yield.
American Bankers Association chief executive Rob Nichols said the decision preserved a route for such rewards despite “Congress’s clear intent to protect local lending”.
“Those gaps risk undermining the distinction Congress drew between payment stablecoins and traditional bank deposits, threatening the funds banks use to make the loans that drive the U.S. economy,” Nichols said in a statement on Wednesday.
“And while we appreciate the OCC’s recognition that additional supervisory experience may inform future action in this area, attempting to address deposit flight and economic harm after it has occurred is the wrong approach.”
The Blockchain Association welcomed the change, saying that removing the presumption brought the final rule “more closely in line with the statutory text”.
“The OCC has taken the framework Congress built and given issuers clear, workable standards for reserves, redemption, and risk management,” said Lindsay Fraser, the organisation’s chief policy officer.
“That clarity will bring more innovation, more competition, and more dollar-backed payments onshore under strong federal oversight.”
A regulatory official told reporters on Tuesday that arrangements involving third-party rewards would be assessed individually.
Investment bank TD Cowen said that approach was negative for banks because it created uncertainty over how the rules would be applied.
“Until the courts rule, there will be ambiguity on what is permitted and what is prohibited, which is a negative,” said TD Cowen’s Washington Research Group, led by managing director Jaret Seiberg, in a note on Wednesday.
“There is also the risk that whoever wins the White House in 2028 will pick a new Comptroller who will take a different view on what constitutes evasion.”
