OCC rule leaves crypto exchanges able to offer stablecoin rewards

The Office of the Comptroller of the Currency said on October 21 that crypto exchanges may pass stablecoin earnings to customers as rewards on a case-by-case basis, leaving the practice available under its new GENIUS Act rule. The Associated Press report said the rule distinguishes exchanges from stablecoin issuers, which remain barred from paying holders interest directly.

Who can pay rewards under the OCC rule?

Exchanges that trade and hold stablecoins, including Coinbase and Robinhood, may pass along earnings from those coins to customers, AP reported. Issuers such as Circle cannot pay interest to people solely for holding their stablecoins.

The OCC announced the final rule to implement the GENIUS Act, the federal framework for payment stablecoins. The agency said the rule covers issuers under its jurisdiction and certain custody activities at OCC-supervised entities. It takes effect on January 18, 2027, according to the OCC announcement.

How does the rewards mechanism work?

Stablecoins are typically pegged to the dollar and backed by assets such as bank deposits and U.S. Treasuries. AP reported that exchanges may share earnings from those backing assets with customers as rewards; the OCC’s case-by-case approach does not prohibit the practice outright.

AP reported Coinbase offers up to 3.5% on USDC balances, compared with a 0.38% average yield for traditional savings accounts, citing Federal Deposit Insurance Corp. figures. The difference has sharpened debate over whether stablecoin rewards could draw deposits away from banks.

What happens next for the rule?

The final rule and the GENIUS Act take effect January 18, 2027, the OCC said. The agency said it will address anti-money-laundering and sanctions requirements in a separate rulemaking with the Treasury Department.

Sources and documents

• Associated Press report — apnews.com
• OCC announcement — occ.treas.gov