OCC proposal to implement GENIUS Act bars stablecoin yield
The US Office of the Comptroller of the Currency (OCC) has released a 376‑page proposal to implement the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, aiming to resolve the ongoing debate over yield on payment stablecoins.
The proposal, published on Wednesday, is open for public comment for 60 days and outlines detailed requirements for permitted payment stablecoin issuers subject to OCC oversight. Read the full proposal
Under the draft rule, supervised entities would be prohibited from paying any form of interest or yield—whether in cash, tokens, or other consideration—“solely in connection with the holding, use, or retention” of a payment stablecoin, in line with section 4(a)(11) of the GENIUS Act.
Thania Charmani, a partner at Winston & Strawn, noted on X that the OCC is seeking to settle the stablecoin yield issue through rulemaking, which could allow the Digital Asset Market Clarity Act of 2025 (CLARITY) to advance without a yield provision.
How the OCC proposal applies GENIUS yield restrictions
GENIUS, enacted in July 2025, established a federal framework for payment stablecoins and limited US issuance to licensed permitted issuers, including bank subsidiaries, newly chartered federal stablecoin issuers, and certain large state‑regulated entities.
The OCC’s draft rule operationalizes that framework by imposing strict limits on how GENIUS‑regulated issuers can structure the economics of their stablecoins.
The proposal introduces a rebuttable presumption that an issuer violates the yield ban if it arranges to pay yield to an affiliate or “related third party,” and that party then provides yield to holders of the issuer’s payment stablecoin.
Issuers may attempt to overcome this presumption by submitting written materials to the OCC. However, the agency emphasizes the “close nexus” between issuer payments and end‑holder yield and characterizes such arrangements as “highly likely” attempts to circumvent the statute.
The draft includes two specific exceptions: it does not seek to prevent merchants from independently offering discounts for using payment stablecoins, and it does not prohibit an issuer from sharing stablecoin‑related profits with a non‑affiliate partner in a white‑label arrangement.
Implications for CLARITY and Coinbase
If finalized in its current form, the OCC’s proposal would directly affect the separate debate under the CLARITY Act regarding rewards on payment stablecoins. Drafts of CLARITY have examined whether digital asset service providers may offer yield or rewards on stablecoin balances, a contested issue among industry participants, including Coinbase.
By prohibiting yield at the issuer level through GENIUS implementation, the banking framework sets a baseline of no yield for GENIUS‑compliant payment stablecoins.
For Coinbase and other firms that have advocated for the ability to offer yield on stablecoin balances within a fully regulated US environment, the proposal delineates a clear regulatory boundary: yield programs are not compatible with GENIUS‑compliant, OCC‑supervised payment stablecoins.
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