OCC Proposes Framework To Implement GENIUS Act, Targets Stablecoin Yield Workarounds
The Office of the Comptroller of the Currency (OCC) has requested the general public for suggestions on its proposed framework to manage stablecoins below the landmark crypto regulation, together with proposals to deal with potential workaround on the curiosity funds ban.
OCC Lays Out Framework For GENIUS Act Implementation
On Wednesday, the OCC issued a proposed rulemaking to implement the landmark stablecoin laws, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
The GENIUS Act was signed into legislation by US President Donald Trump on July 18, 2025. The laws establishes a regulatory framework for cost stablecoin actions within the US.
In the 376-page doc, the company included rules for permitted cost stablecoin issuers and overseas cost stablecoin issuers below the OCC’s jurisdiction and sure custody actions carried out by OCC-supervised entities.
Notably, the OCC may have regulatory authority over sure issuers, corresponding to subsidiaries of nationwide banks or federal financial savings associations, federal certified issuers, state certified issuers, and overseas issuers.
The proposed guidelines cowl all rules the OCC is required to promulgate below the GENIUS Act, together with reserve asset requirements, liquidity and custody necessities, threat administration controls, audits, and supervisory examinations.
However, it exempts guidelines associated to the Bank Secrecy Act, Anti-Money Laundering, and Office of Foreign Assets Control sanctions, which will probably be addressed in a separate rulemaking alongside the Department of the Treasury.
“The OCC has given considerate consideration to a proposed regulatory framework through which the stablecoin trade can flourish in a secure and sound method,” stated Comptroller of the Currency Jonathan Gould in a statement.
“We welcome suggestions on the proposal to tell a remaining rule that’s efficient, sensible and displays broad trade perspective. The OCC will proceed its work to implement the GENIUS Act and supply OCC regulated entities with extra alternatives to fulfill the wants of their prospects and communities,” he added.
Rules To Address Stablecoin Yield Workarounds
The proposed draft additionally tackled a key difficulty associated to the regulation of those belongings: the payments of interest or yield on stablecoins. For context, the laws prohibits curiosity funds on the holding or use of payment-purpose stablecoins, however solely addresses permitted issuers.
Based on this, the banking sector has argued that the GENIUS Act has “loopholes” that would pose dangers to the monetary system and has urged senators to incorporate language within the crypto market construction invoice, generally known as the CLARITY Act, that additionally bans digital asset exchanges, brokers, sellers, and associated entities from providing yield.
The OCC expanded on the GENIUS Act ban, highlighting potential areas that have to be addressed to stop these “loopholes.” The company argued that issuers may try workarounds to “make prohibited funds of curiosity or yield to cost stablecoin holders by means of preparations with third events.”
However, it famous that as a result of giant and altering number of such preparations, it could be unimaginable to determine and deal with all of them. Therefore, it proposed to incorporate a presumption that “sure sorts of preparations with sure sorts of individuals” could be prohibited funds of yield or curiosity by the issuer.
The OCC would presume that an issuer is paying the holder any type of curiosity or yield if: the issuer “has a contract, settlement, or different association with an affiliate or a associated third social gathering to pay curiosity or yield to the affiliate or associated third social gathering;” and if the affiliate or associated third social gathering “has a contract, settlement, or different association to pay curiosity or yield (…) to a holder of any cost stablecoin issued” by the permitted issuer “solely in reference to the holding, use, or retention” of those tokens.
Nonetheless, the OCC clarified that the prohibition will not be supposed to stop a service provider from independently providing a reduction to a holder for utilizing cost stablecoins. It can be not supposed to stop an issuer “from sharing within the income derived from the cost stablecoin with a non-affiliate companion in a white-label association.”
