OCC leaves stablecoin rewards open to crypto exchanges

The Office of the Comptroller of the Currency finalized rules on Oct. 21 that let crypto exchanges seek approval for stablecoin reward programs case by case, while barring issuers from paying holders interest directly. The distinction matters if you earn rewards on stablecoins: existing programs do not get automatic approval. The Associated Press reported that exchanges such as Coinbase and Robinhood may pass along earnings from stablecoin reserves, subject to the OCC’s review.

What does the rule allow exchanges to do?

The OCC’s final rule implements the GENIUS Act, the federal law that sets a framework for payment stablecoins. Stablecoins are designed to hold a steady value, often one U.S. dollar. Issuers such as Circle cannot pay holders interest for holding their coins.

Exchanges and other intermediaries may still offer rewards, but the OCC will assess each arrangement based on its facts. The law bars payments made solely because someone holds, uses or keeps a payment stablecoin. The OCC says a payment made partly for other reasons may fall outside that ban, according to CoinDesk’s report on the final rule.

Does this protect existing rewards programs?

No. Existing programs do not receive special treatment or a safe harbor, CoinDesk reported. Crypto firms will have to show how their programs fit the law as the OCC reviews them. The agency has not given examples of which reward designs will pass.

The rewards debate is about who gets the interest earned on reserves backing stablecoins. The crypto industry wants to share some of that return with customers. Banks have argued that higher crypto yields could pull deposits away from lenders. AP reported that Coinbase offered up to 3.5% on USDC balances, compared with a 0.38% average yield for traditional savings accounts in the latest FDIC figures cited in its report.

When do the rules take effect?

The OCC says the final rule and the GENIUS Act take effect on Jan. 18, 2027. The rule covers stablecoin issuers under OCC oversight and certain custody activities. The agency said it will announce separately when it begins processing issuer applications and waiver requests.

For now, the law still bars issuers from paying holders directly, while leaving some intermediary rewards open to review. Watch for the OCC’s application announcement and for its decisions on specific reward programs before the Jan. 18 effective date.

Source material

• The Associated Press reported — apnews.com
• CoinDesk’s report on the final rule — coindesk.com