Banking Regulator Floats New Stablecoin Yield Rules—Do They Hurt Coinbase?

A key Treasury Division bureau launched preliminary guidelines this week detailing the way it will implement the stablecoin-focused GENIUS Act—and trade consultants are break up about whether or not the proposal might affect America’s high stablecoin rewards program.

On Thursday, the Workplace of the Comptroller of the Foreign money, the nation’s high banking regulator, launched an enormous, 376-page proposed rulemaking detailing the way it intends to implement the GENIUS Act, which was signed into legislation by President Donald Trump final summer season.

Among the many proposed guidelines—that are topic to a 60-day public remark interval—are a number of sections prohibiting sure varieties of stablecoin rewards. The prohibitions seem to outlaw sure preparations between stablecoin issuers and third events through which the third events cross yield onto stablecoin holders in reference to their “holding, use, or retention” of the tokens.

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That sounds not so removed from the present association between USDC issuer Circle and Coinbase. Each firms share income from the yield generated on USDC’s reserves, and Coinbase at the moment presents customers roughly 4% yield, primarily a sort of curiosity fee, on their USDC deposits.

A number of crypto coverage leaders instructed Decrypt they suppose the OCC’s proposed language might affect Coinbase’s present USDC rewards program, however emphasised the complexity of the proposed rule and the chance that it could possibly be labored round.

One of many coverage leaders stated Coinbase was doubtless all the time going to wish to regulate its USDC rewards program not less than considerably after the implementation of the GENIUS Act. Coinbase didn’t instantly reply to Decrypt’s request for touch upon this story.

Final 12 months, Coinbase reported $1.3 billion in stablecoin income. The corporate cited its USDC rewards program as its key development driver in 2025.

Some crypto executives have denounced the OCC’s proposed rulemaking, deeming it regressive.

Scott Johnsson, a finance lawyer and crypto-focused enterprise capitalist, instructed Decrypt he thinks the language “most definitely does” affect Coinbase’s USDC rewards program. However he additionally expects the rule shall be challenged, and altered.

However others have taken a unique tune. Circle’s head of world coverage, notably, recommended the OCC on its proposed rules—a sentiment echoed by Circle’s CEO, Jeremy Allaire.

“That is all a part of accelerating U.S. management in remodeling the financial and monetary system and rebuilding it natively on the web,” Allaire stated.

Maybe underscoring the chance that Coinbase and Circle needn’t fear an excessive amount of concerning the proposed guidelines, a banking trade supply instructed Decrypt that the OCC’s announcement doesn’t give them a lot consolation. The banking foyer has been pushing for months to limit stablecoin rewards, which it worries might siphon prospects away from conventional, low-yield financial institution accounts. 

“It actually would not resolve the issue,” the banking trade supply stated, alluding to potential loopholes within the OCC’s proposed restrictions. The supply emphasised that rulemakings “can all the time be modified.”

The banking trade would reasonably have restrictions on stablecoin yield completely enshrined in legislation, the supply stated. For over a month, banking and crypto representatives have gone forwards and backwards negotiating the difficulty of stablecoin yield, as a part of negotiations on crypto’s stalled market construction invoice. The conferences, led by the White Home, had been supposed to reach at a deal by this weekend—however a deal is unlikely to materialize so quickly, Decrypt reported earlier Friday.

“This doesn’t repair the talk,” Todd Phillips, a legislation professor at Georgia State targeted on financial institution regulation, stated of the OCC’s proposed guidelines. “This isn’t going to fulfill the 2 warring sides.”