In the US, stablecoin regulation sparked debate: the rewards system upset banks

The U.S. Office of the Currency Control (OCC) announced the final regulation targeting stablecoin issuers under the GENIUS Act. Rules setting reserve management, repayment, capital adequacy, and audit conditions are slated to take effect on January 18, 2027. While the ban on issuers paying direct interest remains, the approach to rewards offered by third‑party platforms has put the banking sector and crypto firms at odds.

Stablecoin Interest Ban Maintained

One of the most debated points of the new regulation was the returns offered to stablecoin users. The GENIUS Act bans issuers from paying users direct interest. Yet the conditions under which crypto platforms can offer rewards through their own systems remain under debate.

In OCC's initial draft, there was an approach suggesting that certain commercial relationships between issuers and third parties could violate the interest ban. That assumption was removed in the final text, creating a more flexible framework for third‑party rewards. However, the change does not eliminate the ban on issuers paying direct interest.

Banking Sector Objected

Rob Nichols, president of the American Bankers Association, criticized the regulation for protecting crypto platforms' ability to offer returns. Nichols argued that this approach could narrow the gap between stablecoins and traditional bank deposits and put pressure on the resources banks use in lending.

The Blockchain Association, representing the crypto sector, welcomed the final regulation. The organization’s policy officer Lindsay Fraser said that removing the controversial assumption from the text made the regulation more consistent with the law’s provisions.

Fraser also stated that the standards introduced for reserve protection, repayment processes, and risk management provide companies with a clearer operational framework.

New Auditing Conditions for Issuers

The OCC’s final regulation covers bank subsidiaries within the institution’s jurisdiction and non‑bank stablecoin issuers seeking federal approval. Audit provisions for foreign issuers and the transition processes for companies operating under specific state licenses into the federal system are also included in the regulation.

Under the rules, matters such as companies’ application and registration procedures, reporting obligations, audit processes, and revocation of operating permits under certain conditions are addressed. Management of reserve assets and users’ ability to redeem their stablecoins are also among the core obligations.

The Application Process for the GENIUS Act Begins

The GENIUS Act, which became law in July 2025, established a framework that limits the export of payment‑purpose stablecoins from the United States to entities that meet certain conditions and are authorized. The final rules announced by the OCC detail how the law will be applied to companies under the institution’s oversight.

Anti‑money‑laundering, the Bank Secrecy Act, and sanctions obligations were excluded from this regulation. OCC said the matters would be addressed in a separate framework coordinated with the U.S. Treasury.

With the new rules taking effect, companies operating in the stablecoin sector are expected to be subject to clearer standards in their reserve, repayment, and audit processes. Discussions on interest and reward practices are anticipated to keep the rift between banks and the crypto industry in the spotlight.