OCC adopts flexible stablecoin yield rule, easing restrictions for crypto exchanges

The OCC released a 721-page final rule that resolves the debate created by the GENIUS Act over whether crypto exchanges can offer yield on stablecoins. The rule keeps a ban on direct interest or reward payments by exchanges such as Coinbase and Kraken, but permits case-by-case approval of other activities, for example participation in liquidity pools on decentralized platforms like Uniswap, where users earn trading fees.

This marks a reversal from the agency’s earlier proposal that imposed a blanket prohibition and relied on a rebuttable presumption for exemptions. The American Bankers Association, led by Rob Nichols, condemned the decision, arguing it preserves the status quo against Congress’s intent to protect bank deposits. In contrast, the Blockchain Association, represented by Lindsay Fraser, praised the OCC for listening to industry input and dropping the rebuttable presumption.

Partner Steve Gannon of Davis Wright Tremaine said the rule should simplify issuers’ ability to justify permissible yield, though those unable to do so may need to stop paying it. The development intersects with ongoing legislative efforts, notably the Clarity Act, which would let regulators define allowable incentives and includes a circuit-breaker to halt yield if community banks suffer deposit flight.