The Office of the Comptroller of the Currency (OCC), which charters and supervises national banks, published its final stablecoin rule on October 21, making it the first federal banking regulator to finalize its regulations under the GENIUS Act, the federal framework for payment stablecoins. The rule covers stablecoin subsidiaries of national banks and federal savings associations, nonbank federal qualified issuers, certain state issuers that fall within its enforcement reach, and foreign issuers registered with the agency. It takes effect on January 18, 2027, the same day the GENIUS Act itself becomes operative.

What the OCC dropped, and why

The February proposal targeted one specific route for yield. Under that draft, if an issuer paid an affiliate or a “related third party,” and that party in turn paid stablecoin holders, the arrangement would have been presumed to violate the ban on issuer-paid yield. Related third parties included firms paying yield on an issuer’s behalf as well as white-label partners selling a coin under their own brand. Issuers could rebut the presumption, but the burden of proof sat with them.

The final rule removes that test. The OCC’s reasoning is that a presumption could err in both directions: it might capture legitimate arrangements while making anything outside its wording look acceptable by default. An OCC official also told reporters that the February language was an estimate of how likely evasion was, rather than a reflection of how young the market still is.

In place of the presumption, examiners will assess individual arrangements during application reviews and ongoing supervision. The agency says it will act against violations and evasion and will issue further public guidance where needed. It offered no examples of structures that would fail.

What “solely” leaves room for

The GENIUS Act bars an issuer from paying interest or yield “solely in connection with the holding, use, or retention of such payment stablecoin.” The final rule keeps that wording, and the OCC signaled that a payment made at least partly for other reasons would fall outside the ban.

That makes funding the central question. An exchange paying holders from its own budget is not making an issuer payment, although anti-evasion rules still apply if the money traces back to the issuer. A platform that receives part of an issuer’s reserve income and passes it on to holders, by contrast, is precisely the arrangement the February presumption was built to catch.

Several large platforms advertise rewards near 4%. At the time of writing, Coinbase One members are offered 3.75% on USDC, PayPal advertises 4% on PYUSD, and Kraken+ subscribers can earn up to 4.5% on USDG. A June BIS bulletin found that Coinbase’s USDC yield moves with the policy rate because it passes on income from the token’s reserves.

How a reward reaches a holder — and which regulator can ask those questions — depends on the issuer’s charter. USDC, for example, is set to be issued by a New York trust company rather than Circle’s OCC-chartered national trust bank.

No head start for older programs

The OCC was urged to treat rewards programs that predated the GENIUS Act as compliant, on the grounds that Congress knew about them when it passed the law. The agency declined, saying Congress’s awareness of a program is not necessarily an endorsement.

For someone earning a reward today, nothing in the rule switches it off on January 18. The practical risk is a change in terms if an issuer’s regulator objects to how the payments behind it are funded.

Why banks wanted the presumption kept

Banks view stablecoin rewards as a threat to their deposit base and pushed to tighten the yield rules through the CLARITY Act, the market-structure bill. That fight helped stall the legislation, which failed a key Senate vote in September.

Commenters asked the OCC to account for the possibility that Congress would still rewrite the yield rules. The agency replied that until such a law passes, it must implement the GENIUS Act’s yield prohibition as enacted, leaving the 2025 wording in place.

Research on how banks can compete with stablecoins by paying savers more cites a BIS working paper that rises in US deposit rates were followed by slower stablecoin growth between 2019 and mid-2025, with USDC more sensitive than USDT. Banks can hold on to balances by paying more, but that narrows their margins. Tighter limits on stablecoin rewards would spare them some of that cost.

What issuers must fund besides reserves

Interest on reserves is the main way a fiat-backed issuer earns money, and the rule adds costs that compete with any share paid to partners. Reserves must back every token in circulation. On top of that, the final text requires at least $5 million of capital — more where risk warrants — and an operational backstop covering 12 months of total expenses.

The backstop is designed to keep an issuer running through a disruption. It is separate from the reserves owed to holders and from the capital that absorbs losses. Allowing debt to cover up to half of it reduces the equity a new issuer must raise, but both the capital and the backstop have to be in place regardless of how much reserve income an issuer shares with partners.

January 18 and the approval gap

January 18 is the outer limit the GENIUS Act set for its own effective date — 18 months after President Donald Trump signed it — and the rule takes effect the same day. The application process has not opened yet. The OCC will accept applications and waiver requests only after the Office of Management and Budget (OMB) approves the related information collection, and it has not said when that will happen.

The current timeline:

• Feb 25, 2026 — OCC publishes its proposal
• Oct 21, 2026 — Final rule released
• Jan 18, 2027 — Rule and GENIUS Act take effect
• Jan 25, 2027 — First weekly report due
• Mar 31, 2027 — First quarterly report due
• No date yet — OMB approval that opens applications and waiver requests

The timing is tightest for issuers already operating in the United States. Under the OCC’s waiver guidance, a qualifying issuer with a substantially complete application pending by January 18 can ask to keep operating while the agency decides. The OCC expects to grant those requests for existing US operators unless its review turns up stronger grounds to refuse. Relief lasts up to a year and will be limited to the time the review needs.

The waiver covers prior approval only. The OCC says it sees no general reason to waive the rule’s other requirements, so an issuer operating under a waiver is still expected to meet them. Companies not yet operating in the United States should generally obtain approval before they launch.

Both reporting dates depend on OMB approval of the revised reporting forms, which remain open for public comment.

What the rule leaves open

Bank Secrecy Act, anti-money-laundering, and sanctions rules will come through a separate rulemaking with Treasury. The FDIC, the Federal Reserve, and Treasury also have GENIUS Act proposals in progress, and not all of them are likely to be final by January.

On rewards, the first tests will come in application reviews, where examiners will see the contracts between issuers and the platforms that pay holders. Supervisory findings are generally confidential, so the market may learn the outcome only through changed reward terms or further OCC guidance.

This article is provided for informational purposes only and does not constitute legal, financial, or investment advice.