OCC leaves crypto exchange rewards open case by case

On Wednesday, October 21, the Office of the Comptroller of the Currency finalized a stablecoin rule that keeps crypto exchanges’ interest-like rewards open for case-by-case review, while barring issuers from paying holders directly. The decision leaves a key distinction in place for companies such as Circle and Coinbase, as regulators weigh the GENIUS Act’s limits on stablecoin yield.

• The OCC published the final rule on October 23.
• It takes effect January 18, 2027.
• Coinbase offers up to 3.5% yield on USDC balances, AP reported.
• The average traditional savings account yield is 0.38%, according to FDIC figures cited by AP.

The Associated Press report said exchanges that trade and hold stablecoins, including Coinbase and Robinhood, can pass along earnings to customers as rewards. Stablecoins are cryptocurrencies designed to hold a steady value, often around $1. Their reserves can include bank deposits and U.S. Treasury securities that earn interest.

What does the rule allow exchanges to do?

The OCC will assess specific reward arrangements based on their facts, rather than treating them as automatically prohibited. The agency’s final rule in the Federal Register says it removed a proposed rebuttable presumption that would have treated certain issuer agreements with affiliates or related third parties as prohibited yield payments.

That gives exchanges room to keep offering rewards, but it does not create a blanket safe harbor. The OCC says the law still bars an issuer from paying a stablecoin holder interest or yield solely for holding, using or retaining the coin. The agency also retains authority to address attempts to evade that ban.

The rule does not list which third-party programs will pass review. Instead, the OCC says it will apply the law to each arrangement’s facts and circumstances. Rewards programs that existed before the GENIUS Act will face the same assessment as newer ones.

Why did banks challenge the rewards?

Banking groups say higher crypto yields could draw customer money away from bank deposits and reduce funds available for lending. AP reported that the American Bankers Association said the OCC’s decision threatens funds banks use to make loans. The OCC rule’s outcome preserves the possibility that platforms can compete for stablecoin holders with returns above typical savings rates.

The disagreement also concerns what customers understand they are buying. AP reported that consumer advocates worry people may see stablecoin rewards as similar to interest from a bank account. Stablecoins do not have the equivalent of deposit insurance offered by the Federal Deposit Insurance Corporation, AP noted.

When does the rule take effect?

The OCC’s rule is effective January 18, 2027, the date the agency says the GENIUS Act will also take effect. The act, enacted July 18, 2025, establishes a federal framework for payment stablecoins.

For crypto companies, the near-term message is that issuer-paid yield remains prohibited, while exchange rewards will depend on how each program is structured. The OCC has not promised that existing programs will be allowed to continue unchanged. It says it will evaluate them under the same standard as any other arrangement.

Sources and documents

• Associated Press report — apnews.com
• final rule in the Federal Register — thefederalregister.org