Three U.S. banking advocacy groups criticized the final stablecoin rule unveiled by the Office of the Comptroller of the Currency (OCC) on October 21, 2026, while crypto industry representatives welcomed the change as more consistent with congressional intent. The OCC supervises U.S. national banks, a role that makes its reading of the stablecoin law consequential for both sides of the dispute.

The banking groups warned that rewards offered by third parties could encourage people to move funds out of banks, potentially reducing deposits and weakening lending. The dispute centers on how the GENIUS Act’s restrictions on stablecoin yield apply when rewards are distributed through exchanges or other intermediaries. Because the Act prohibits issuers from paying interest directly, how intermediary-distributed rewards are treated determines much of the restriction’s practical reach.

Banking groups challenge the OCC

American Bankers Association (ABA) CEO Rob Nichols accused the OCC of allowing crypto companies to provide rewards despite what he described as Congress’s intention to protect the lending industry. He said the damage could occur before any deposit outflows become visible, according to The Block.

In its statement on the OCC’s final rule, the ABA also said the practices could create confusion between stablecoins and traditional bank deposits.

Paige Pidano Paridon, an executive at the Bank Policy Institute, condemned the ruling, saying it “replaces clarity with ambiguity.” She said unclear rules could expose banks to the loss of deposits. The institute outlined its concerns in a statement on the OCC’s GENIUS Act rule.

Rebeca Romero Rainey, CEO of the Independent Community Bankers of America (ICBA), similarly called for measures to protect community banks and their lending capacity. The ICBA has continued to press the OCC to limit the impact of stablecoin rules on local lending.

What the OCC changed

The GENIUS Act prohibits stablecoin issuers from directly paying interest to holders. Questions remained, however, over rewards provided through exchanges and other intermediaries.

Under the OCC’s February proposal, certain arrangements would have been presumed illegal unless they could be justified otherwise. The final rule abandoned that presumption and instead requires regulators to assess arrangements individually — a shift from a blanket default to judgment calls that turn on the structure of each arrangement.

The OCC retains authority to act against attempts to circumvent the ban. The agency’s final rule will take effect on January 18, 2027, leaving banks, exchanges, and stablecoin issuers to prepare for a regime in which reward arrangements are evaluated one at a time.

Crypto advocates welcome the change

Lindsay Fraser, policy chief at the Blockchain Association, welcomed the decision, saying it brings the regulatory framework closer to what Congress intended. She said the change could support the of dollar-backed payments under federal oversight.

Jaret Seiberg of TD Cowen said uncertainty remains because courts and future regulators could take different positions on which reward arrangements are permitted.

Conflicting estimates on lending

The ICBA estimates that stablecoin adoption could lead to a decline of at least $850 billion in community bank lending. That figure is a forecast, however, rather than a fixed amount of lending already lost.

The White House Council of Economic Advisers examined a different scenario in an April 2026 study. It concluded that prohibiting stablecoin yield would produce a $2.1 billion increase in lending while creating a welfare cost of $800 million.

The estimates measure different effects and rely on different assumptions — a spread that helps explain why the banking and crypto industries describe the same rule in such different terms, from a threat to lending to a step toward Congress’s intent. A BIS analysis found that stablecoins and bank deposits compete for funds to some extent, but it did not establish lending losses on either scale.

Global implications

The debate extends beyond U.S. banks. Circle CEO Jeremy Allaire told Reuters that the company plans to expand into around 40 emerging markets, citing growing demand across Asia, Africa, Latin America and the Middle East.

As the use of dollar-backed stablecoins expands globally, U.S. rules on rewards could influence how banks and digital payment providers compete for customers. How regulators apply the case-by-case standard once the rule takes effect on January 18, 2027 will shape whether the uncertainty analysts describe persists.