The initiative by the Office of the Comptroller of the Currency (OCC) aims to gather insights from the industry regarding its prospective regulatory framework for stablecoins. This touches on critical measures to mitigate potential circumventions of the interest payment prohibition.
OCC Unveils Framework for Stablecoin Regulation
Recently, the OCC made headlines by unveiling a detailed proposal aimed at implementing the revolutionary stablecoin legislation, known as the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
Signed into law on July 18, 2025, by former US President Donald Trump, the GENIUS Act lays the groundwork for regulatory oversight of stablecoin transactions across the nation.
In its extensive 376-page documentation, the OCC detailed regulatory measures for both domestic and foreign stablecoin issuers and outlined custody activities relevant to OCC-supervised entities.
Importantly, this regulatory authority extends to various issuers, including but not limited to national bank subsidiaries, federal savings associations, and certain state and foreign issuers.
Included in the proposed rules are essential aspects that the OCC is mandated to establish under the GENIUS Act, encompassing standards for reserve assets, liquidity, security requirements, effective risk management controls, formal audits, and comprehensive supervisory examinations.
However, it is crucial to note that regulations tied to the Bank Secrecy Act, Anti-Money Laundering directives, and the Office of Foreign Assets Control sanctions will be addressed separately in conjunction with the Department of the Treasury.
“Our agency has put forth a carefully thought-out regulatory structure aimed at ensuring the stablecoin sector can thrive within secure parameters,” said Comptroller of the Currency Jonathan Gould in a public statement.
“We look forward to receiving feedback from the public to refine these proposals, making them not only effective but also practical for our diverse industry,” he added, emphasizing the OCC’s commitment to enhancing opportunities for regulated entities to cater to community needs.
Exploring Solutions for Stablecoin Yield Concerns
The proposed framework also delves into a significant regulatory challenge—yield generation on stablecoins. Specifically, the legislature bans interest payments on stablecoins designated for payments while allowing a focus on authorized issuers.
In this pivotal light, the banking community has raised concerns about potential “loopholes” embedded within the GENIUS Act, urging lawmakers to incorporate language into the crypto market structure bill, termed the CLARITY Act, which would restrict yield offerings across digital asset exchanges, brokers, and dealers.
The OCC has sought to expand beyond the initial ban outlined in the GENIUS Act, pinpointing critical areas that must be addressed to close these potential gaps. Officials propose that issuers might explore circumventive strategies, leveraging arrangements with third parties to provide unauthorized interest or yield payments.
Recognizing the vast and adapting nature of such strategies, the OCC notes the difficulty in identifying all potential circumventive measures. Consequently, they proposed a presumption detailing that “certain types of arrangements with specific individuals” would be construed as disallowed yield payments.
Specifically, issuers would be presumed to be distributing payments of interest or yield if: the issuer has an agreement with an affiliate or related third party to provide such yield, and if the third party also agrees to pass on these payments to stablecoin holders.
Nevertheless, the OCC wants to clarify that this prohibition does not extend to allowing merchants to offer discounts for consumer usage of payment stablecoins, nor does it prevent issuers from engaging in profit-sharing arrangements with non-affiliate partners in a white-label setup.
