Stablecoins: US banks challenge the treatment of indirect yields

Yield remains at the centre of the debate

The American Bankers Association has criticised the Office of the Comptroller of the Currency's approach to yields associated with payment stablecoins. In a statement on the final rule implementing the GENIUS Act, the banking organisation welcomes the establishment of a regulatory framework but considers the treatment of arrangements involving platforms, affiliates and other distribution partners insufficient.

Its objection concerns the removal of a presumption included in the original proposal. That mechanism would have allowed certain arrangements to be considered contrary to the prohibition on yields unless demonstrated otherwise. In the association's view, abandoning it risks leaving in place payments economically similar to interest, even when they are not paid directly by the issuer to the holder.

The OCC retains powers against circumvention

The final regulation maintains the prohibition on a covered issuer paying interest or yield solely in connection with holding, using or retaining a payment stablecoin. Removing the presumption does not amount to blanket permission for indirect rewards. The OCC states that it retains its authority to act against transactions that violate or circumvent this prohibition.

In the explanations accompanying its decision, the authority considers that the presumption could have captured permitted arrangements while implying that arrangements outside its scope were necessarily compliant. It favours an assessment of facts and circumstances through application reviews and issuer supervision. It does not publish an exhaustive list of structures that are always permitted or prohibited.

This distinction matters when interpreting commercial offers. A reward advertised by a platform and interest paid by an issuer do not automatically describe the same relationship. The payer's identity, funding source and programme conditions can change the analysis. The word 'reward' alone does not resolve the compliance question.

A banking risk put forward by the banks

The association presents indirect remuneration as a risk to the deposits that finance local bank lending. This is the argument that the banking association itself puts forward as part of the ongoing regulatory debate. Its statement does not, on its own, demonstrate that deposit flight or a contraction in credit has already been caused by the new rule. The scale of any economic effect requires separate observations.

The disagreement therefore concerns how to prevent the risk: imposing broader restrictions on certain arrangements from the outset, as the banks request, or retaining a supervised case-by-case analysis. These approaches create different constraints for businesses distributing stablecoins or offering benefits to their users.

A defined effective date and scope

The OCC bulletin sets the rule's effective date at 18 January 2027. It covers activities and entities within the authority's jurisdiction, including certain US issuers, covered foreign issuers and custodial activities. It should not be read as automatically granting approval to every stablecoin already on the market.

The framework also addresses reserves, redemptions, risks, controls and supervision. Anti-money-laundering and sanctions provisions are the subject of a separate regulatory effort coordinated with the Treasury. The debate over yields is therefore one specific part of implementing the GENIUS Act.