The GENIUS Act bars stablecoin issuers from paying interest or yield to holders. The open question was whether that ban also reaches rewards paid through affiliates and partners. In its final rule, the Office of the Comptroller of the Currency (OCC) has declined to settle it in advance.
The rule was issued on October 21 and takes effect on January 18, 2027. The OCC expects 39 entities to become issuers under its supervision. Twenty-five of them are national banks and federal savings associations that will issue directly or through subsidiaries. The yield ban is therefore a constraint on banks as issuers, not only on crypto firms.
The statutory ban stays. An issuer may not pay interest or yield solely for holding, using or keeping a payment stablecoin. What changed is the enforcement mechanism. The proposal carried a rebuttable presumption that certain payments to affiliates and related third parties broke the ban. Arrangements caught by the presumption would have had to go through a rebuttal process. The OCC removed the presumption, saying it could catch lawful arrangements and miss unlawful ones, and that the rebuttal process risked burden without a matching benefit. The work of finding evasion now sits with the OCC, through monitoring, rather than with issuers proving their innocence.
The OCC also offered issuers no protection. There is no exemption for small payments. There is no safe harbour for rewards programmes that existed before the Act, for white-label partners, for DeFi arrangements or for arrangements that are securities. The OCC did not define interest or yield, and said labels will not decide the question. “Interest does not stop being interest merely because it is given a different name,” it wrote.
The word that matters is “solely”. A payment breaks the ban only if it is interest or yield and is paid solely for holding, using or keeping the coin. The OCC said payments for genuine services generally fall outside the ban, and that transaction-based payments will be judged on their facts. Until the OCC acts on a specific arrangement, issuers and their partners are working without a definition, a presumption or a safe harbour. The OCC has said it expects to propose a rule clarifying the ban once it has enough supervisory experience.
Liquidity and Redemption
On reserves, the final rule is lighter than the proposal. Issuers must hold at least 5% of reserve assets in demand deposits or Federal Reserve balances, down from 10%. Redemptions must be completed within two business days. The proposal would have extended that period to seven calendar days once redemption requests passed 10% of outstanding issuance in 24 hours. The OCC dropped the extension, agreeing with commenters that it could prove pro-cyclical and trigger or worsen runs. An issuer facing that level of requests must now notify the OCC within 24 hours.
These changes cut in opposite directions. Issuers need to hold less cash, but they no longer have a fallback period under stress. The OCC said that issuers holding only the 5% minimum should take steps to make sure they can still redeem on time. The $5 million capital floor remains and now applies beyond the startup period.
From January 18, 2027, issuing a payment stablecoin in the US without approval carries criminal penalties. The OCC will open applications only after the Office of Management and Budget approves its forms. An issuer with a substantially complete application pending on or before that date can request a waiver of up to 12 months. The OCC says it generally expects to grant prior-approval waivers to existing US issuers.
The rule leaves the yield question to enforcement. The 25 banks expected to issue, and the banks competing with stablecoin rewards for deposits, will learn where the line sits from the OCC’s first action, not from the text of this rule.
