OCC finalizes GENIUS Act rules for stablecoin issuers and custody

The U.S. Office of the Comptroller of the Currency (OCC) has issued a final rule under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, requiring crypto exchanges to obtain approval for their stablecoin reward programs. The OCC, an independent bureau of the Treasury Department, oversees U.S. national banks and trusts, which will play a central role in the issuance of stablecoins under the law.

The rule establishes the regulations for the issuance and custody of dollar-based stablecoins, as well as the third-party relationships between issuers and exchanges.

The OCC has declined to provide examples of what types of reward operations may violate the GENIUS Act, which prohibits payments made solely in connection with holding, using, or retaining such payment stablecoins. The industry will have to test the agency's case-by-case oversight to understand the rule, with the prohibition set to go into effect on January 18.

The OCC stated that the "solely" language in the prohibition carries significant weight, and that rewards made in part for other reasons would not be banned under the GENIUS Act.

The rule also addresses the existing rewards programs, noting that the OCC does not presume that these programs comply with the GENIUS Act. Without amendments negotiated by bankers, the unchanged GENIUS Act remains the standard for how exchanges govern their rewards programs. While the OCC rule has provided clarity for private-sector innovation and U.S. leadership in digital assets, the questions of yield have remained a contentious issue in stablecoin regulation.