The US Office of the Comptroller of the Currency has unveiled a sweeping 376 page proposal to implement the Guiding and Establishing National Innovation for US Stablecoins Act, better known as the GENIUS Act. The draft rule aims to settle one of the most divisive issues in the digital asset industry: whether payment stablecoins should offer yield.
Published this week, the proposal opens a 60 day public comment period and lays out how the OCC plans to supervise permitted payment stablecoin issuers under its authority. At its core, the rule would bar supervised entities from offering any form of interest or yield tied to the holding, use, or retention of a payment stablecoin.
The move could reshape the broader regulatory debate, including discussions around the proposed Digital Asset Market Clarity Act of 2025, commonly referred to as CLARITY.
No Yield for GENIUS Compliant Stablecoins
The GENIUS Act, enacted in July 2025, created a federal framework for payment stablecoins. It limits issuance in the United States to licensed entities such as bank subsidiaries, newly chartered federal stablecoin issuers, and certain large state regulated firms.
The OCC’s proposal translates that statutory framework into day to day operational rules. A central provision prohibits supervised issuers from paying any kind of yield, whether in cash, tokens, or other consideration, solely in connection with holding or using a payment stablecoin. The restriction aligns with section 4(a)(11) of the GENIUS Act.
In practical terms, if the rule is finalized as drafted, any stablecoin issued under the OCC’s oversight would function strictly as a payment instrument rather than a savings or investment product.
OCC Requests Comments on Proposal to Implement GENIUS Act. Source: OCC
Legal observers say the agency is attempting to close the door on creative interpretations of the statute. Thania Charmani, a partner at Winston & Strawn, wrote on X that the OCC appears to be resolving the stablecoin yield debate through rulemaking, potentially clearing the way for CLARITY to move forward without having to tackle the issue directly.
Affiliate Structures Under Scrutiny
The proposal goes beyond a straightforward ban on issuer paid yield. It introduces a rebuttable presumption that an issuer is violating the law if it pays yield to an affiliate or related third party, and that entity in turn passes yield on to stablecoin holders.
Under this structure, the OCC would presume that such arrangements are designed to sidestep the statutory prohibition. Issuers would have the opportunity to rebut that presumption by submitting written materials to the agency. However, the proposal emphasizes the close link between issuer payments and end holder rewards and describes these setups as highly likely attempts to evade the law.
This approach signals that the OCC is not only concerned with direct yield payments but also with indirect reward models that could replicate the economic effect of interest.
Limited Carve Outs for Merchants and Partners
While the proposal takes a strict stance on yield, it does provide two clear carve outs.
First, the rule is not intended to prevent merchants from independently offering discounts to customers who use payment stablecoins. Such incentives, according to the draft, would not automatically be treated as yield tied to the stablecoin itself.
Second, the OCC would allow issuers to share profits from a stablecoin with a non affiliate partner in a whitelabel arrangement. In these cases, profit sharing is not automatically considered a violation, provided it does not function as a backdoor way to deliver yield to holders.
These carve outs suggest the agency is trying to distinguish between commercial incentives in the marketplace and financial returns linked directly to stablecoin balances.
Implications for the CLARITY Debate
The proposal’s timing is significant given ongoing discussions around the Digital Asset Market Clarity Act of 2025. CLARITY drafts have wrestled with whether digital asset service providers should be allowed to offer rewards or yield on payment stablecoin balances.
The issue has already drawn pushback from industry players, including Coinbase, which has argued that companies operating within a fully regulated US framework should be able to provide yield on stablecoin holdings.
If the OCC finalizes its rule as written, it would effectively set a no yield baseline for GENIUS compliant, OCC supervised payment stablecoins. That would draw a clear regulatory line between payment stablecoins designed for transactions and products that resemble interest bearing accounts.
For Coinbase and similar firms, the message is unmistakable. Yield and GENIUS compliant stablecoins would exist on opposite sides of the regulatory framework. Companies seeking to offer stablecoin rewards may need to explore structures outside the OCC supervised payment stablecoin model or push for legislative changes.
A Defining Moment for Stablecoin Regulation
The 60 day public comment period is likely to attract significant industry feedback. The stablecoin market has grown rapidly, and yield bearing products have been a key driver of user adoption in certain segments.
By moving to codify a strict interpretation of the GENIUS Act, the OCC is signaling that payment stablecoins, at least under its watch, should prioritize stability and utility over returns. Whether lawmakers and market participants accept that boundary will shape the next phase of US digital asset regulation.
For now, the proposal marks one of the clearest statements yet from a federal banking regulator: if a stablecoin is issued under the GENIUS framework and supervised by the OCC, it is not meant to pay interest.
