The U.S. Office of the Comptroller of the Currency (OCC) has unveiled a 376-page proposal to implement the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which aims to settle the contentious debate over stablecoin yields.
The proposal, open for public comment for 60 days from its publication, outlines detailed rules for payment stablecoin issuers under the OCC’s jurisdiction. A key provision is the prohibition of any form of interest or yield, whether in cash, tokens, or other considerations, ‘solely in connection with the holding, use, or retention’ of a payment stablecoin, as mandated by section 4(a)(11) of the GENIUS Act.
Resolving the Yield Debate
Thania Charmani, a partner at global law firm Winston & Strawn, noted on X that the OCC’s proposal seeks to ‘resolve the debate on stablecoin yield through rulemaking,’ which could clear the way for the Digital Asset Market Clarity Act of 2025 (CLARITY) to proceed without the contentious yield provision.
Implementing GENIUS: Key Points
The GENIUS Act, enacted in July 2025, established a federal framework for payment stablecoins and restricted their issuance to licensed entities, including bank subsidiaries, new federal stablecoin issuers, and certain large state-regulated firms. The OCC’s draft rule translates this statutory framework into operational constraints, imposing tight limits on how GENIUS-regulated issuers can structure their stablecoin economics.
The proposal also introduces a rebuttable presumption that an issuer is violating the yield ban if it has an arrangement to pay yield to an affiliate or ‘related third party,’ which then pays yield to holders of the issuer’s payment stablecoin. Issuers can attempt to rebut this presumption by submitting written materials to the OCC, but the agency emphasizes the ‘close nexus’ between issuer payments and end-holder yield, framing such structures as ‘highly likely’ attempts to evade the statute.
Carve-Outs and Exceptions
Despite the stringent rules, the proposal includes two explicit carve-outs. It does not intend to prevent merchants from independently offering discounts for using payment stablecoins, and it does not bar an issuer from sharing profits from the stablecoin with a non-affiliate partner in a white-label arrangement.
Implications for CLARITY and Coinbase
If the OCC’s proposed rule is finalized as drafted, it will have significant implications for the ongoing debate over the CLARITY Act, particularly regarding whether digital asset service providers should be allowed to pay yield or rewards on payment stablecoin balances. This point of contention has already caused friction among industry stakeholders, including Coinbase.
By prohibiting yield at the issuer level, the banking side of the framework effectively sets a no-yield baseline for GENIUS-compliant payment stablecoins. For companies like Coinbase, which have argued for the ability to offer yield on stablecoin balances within a fully regulated U.S. framework, the message is clear: stablecoin yield and GENIUS-compliant, OCC-supervised payment stablecoins are on opposite sides of a regulatory line.
Forward-Looking Insights
The OCC’s proposal represents a significant step in the regulatory landscape for stablecoins, aiming to provide clarity and consistency in a rapidly evolving market. As the proposal undergoes public scrutiny and potential revisions, the broader crypto community will be closely watching to see how these regulations shape the future of stablecoin issuance and usage in the United States.
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