The U.S. Office of the Comptroller of the Currency (OCC) has become the first of several federal agencies to finalize regulations under the GENIUS Act. Under the new framework, U.S. cryptocurrency exchanges that already offer rewards to customers for using stablecoins will need to obtain the regulator’s approval for their existing programs, according to the OCC.

The OCC, which supervises national banks and trust companies expected to play a major role in stablecoin issuance, released its final rule on Wednesday. The regulation outlines how companies issuing dollar-pegged tokens must operate, including how they manage relationships with third parties, such as cryptocurrency exchanges where their stablecoins are traded.

The OCC, an independent bureau within the Treasury Department, has not provided specific examples of rewards programs that could violate the GENIUS Act. The legislation prohibits payments to customers made “solely in connection with the holding, use, or retention of such payment stablecoin.”

Existing rewards programs will not receive automatic protection under the new framework. Companies will therefore have to navigate the OCC’s case-by-case enforcement approach to determine which activities are permitted. The regulation is scheduled to take effect on January 18.

The regulator said it would assess each arrangement according to the law and its individual circumstances. However, the OCC indicated that the word “solely” is central to interpreting the restriction. Rewards offered partly for other reasons could potentially fall outside the prohibition.

Payment stablecoins are designed to maintain a stable value, generally by tracking the U.S. dollar. They serve as a less volatile alternative to cryptocurrencies whose prices can fluctuate sharply. Tether’s USDT and Circle’s USDC currently dominate the market, although additional companies are entering the sector.

OCC Establishes Rules for Stablecoin Issuers

Wednesday’s comprehensive regulation sets out procedures for regulated institutions and foreign companies seeking to issue stablecoins in the United States. It also establishes requirements for the custody of these assets.

The rule is part of a wider regulatory effort involving several federal agencies. Certain provisions, including those concerning compliance with the Bank Secrecy Act, will be addressed separately by other Treasury Department offices.

Treasury Secretary Scott Bessent welcomed the development, saying the OCC’s final rule advances the GENIUS Act by creating a practical and clear foundation for private-sector innovation, competition and U.S. leadership in digital assets.

However, the question of whether stablecoin companies should be allowed to offer yield or customer rewards remains one of the industry’s most contentious regulatory issues.

Stablecoin Rewards Remain a Point of Dispute

Several financial companies, including U.S. crypto exchange Coinbase, already operate established rewards programs similar to incentives offered by credit card providers. PayPal and Kraken are among the platforms advertising some of the market’s higher reward rates.

The GENIUS Act prohibits stablecoin issuers from directly providing holders with payments that amount to interest. This restriction generated substantial debate and prompted numerous industry responses when the OCC initially proposed its regulations.

Banking groups have argued that stablecoin rewards programs could pose a serious competitive threat to traditional bank deposits, which are central to their business models. Their concerns led to lobbying efforts to amend the GENIUS Act through the proposed Digital Asset Market Clarity Act.

The debate became so contentious that the market-structure legislation failed to secure unanimous Republican support during a key Senate vote last month, preventing it from advancing at that stage.

Without the proposed amendments negotiated by banks, cryptocurrency firms, lawmakers and the White House, the existing GENIUS Act remains the governing standard for exchanges such as Coinbase. Banks that feared the legislation could weaken their deposit base have not secured the changes they sought, even as bank deposits have continued to increase amid growing interest in stablecoins.

The OCC’s final rule acknowledged that some commenters wanted the agency to account for the possibility that the Clarity Act could eventually change the GENIUS Act’s treatment of rewards. However, the regulator said it must enforce the current law unless and until new legislation is passed.

When the OCC first introduced its proposal earlier this year, crypto firms were uncertain about how the agency would enforce provisions designed to prevent companies from circumventing the restrictions on stablecoin issuers offering yield or rewards. Since then, some companies have interpreted the regulatory approach as leaving room for certain incentives delivered through third-party platforms.

For example, PayPal offers a 4% return to users holding its PYUSD stablecoin, Coinbase One provides 3.75% on USDC balances, and Kraken+ subscribers can earn up to 4.5% on USDG accounts.

The OCC made clear that existing rewards programs would not automatically be considered compliant simply because they were established before the GENIUS Act became law. It also noted that congressional awareness of these programs does not necessarily mean lawmakers intended to authorize them.

The final rule also removed several provisions known as “rebuttable presumptions,” which would have presumed that certain specified activities violated the regulation.

Other Federal Agencies Are Still Developing Rules

The OCC is not the only regulator responsible for implementing the GENIUS Act. The agency’s work may influence the approaches taken by other federal authorities, including the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC).

Although the legislation called for regulators to meet a midyear deadline, several agencies are still developing their rules.

• FDIC: The agency issued application standards late last year and proposed its regulatory approach for state-chartered institutions in April.
• Treasury Department: In August, the department proposed rules addressing its responsibilities under the GENIUS Act. The industry is particularly focused on how the framework will apply to foreign stablecoin issuers, including Tether.
• FinCEN and OFAC: In April, the Treasury Department’s Financial Crimes Enforcement Network and Office of Foreign Assets Control jointly proposed requirements for stablecoin businesses. These included controls to stop or freeze transactions and compliance obligations under the Bank Secrecy Act, which governs much of the U.S. financial system.
• Federal Reserve: Last month, the Fed proposed rules for subsidiaries of member banks that plan to issue stablecoins. The proposals cover issuance procedures and standards for capital and reserves.

The GENIUS Act’s broader implementation was expected to take effect in January, but the remaining rulemaking schedules and public-comment periods suggest that all required regulations may not be finalized by that deadline.

OCC officials told reporters that the final rule could create opportunities for a wider range of institutions, including community banks, to participate in the stablecoin market.

The agency also revised its reserve requirements between the proposed and final versions of the regulation. It adopted a principles-based approach to reserve diversification and concentration, supported by requirements designed to maintain sufficient daily liquidity and prevent excessive dependence on a single counterparty.