U.S. regulator's GENIUS pitch casts dark cloud over crypto sector's stablecoin model

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U.S. regulator's GENIUS pitch casts dark cloud over crypto sector's stablecoin model

The U.S. Office of the Comptroller of the Currency proposed rules that would govern stablecoins, including apparent limits on rewards that may affect Coinbase.

By Jesse Hamilton|Edited by Nikhilesh De

Updated Feb 26, 2026, 10:01 p.m. Published Feb 26, 2026, 9:58 p.m.

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Jonathan Gould's Office of the Comptroller of the Currency may have just proposed a rule that makes offering stablecoin rewards more difficult. (Nikhilesh De/CoinDesk)

What to know:

• The crypto industry is digging through a lengthy stablecoin proposal from the U.S. Office of the Comptroller of the Currency, but the first impression suggests it could hamper crypto platforms' stablecoin rewards programs.
• The banking regulator pitched the rulemaking to implement the GENIUS Act, but crypto insiders are saying they'll have to fight what the agency came up with.
• This emerging regulatory dispute further complicates negotiations over the Senate's long-awaited Clarity Act that's meant to regulate the overall U.S. crypto markets.

The crypto industry's stablecoin operations, such as the arrangement between issuer Circle and leading exchange Coinbase, could be under serious pressure in the U.S. Office of the Comptroller of the Currency's newly proposed set of stablecoin rules.

Even as OCC chief Jonathan Gould testified in the U.S. Senate on issues that included crypto oversight on Thursday, people in the industry said they've been trying to understand his agency's 376-page proposal to regulate domestic issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act that became law last year. The allowance of stablecoin yield and reward has not only been central to the GENIUS Act, but it's also been a chief negotiation point in the more important follow-up legislation known as the Digital Asset Market Clarity Act.

Close financial ties between issuers and crypto platforms that handle their tokens "would make it highly likely that the issuer’s payments of yield or interest would be made to the holder through an intermediary or an attempt the evade the GENIUS Act’s prohibition on interest and yield payments," the OCC proposal suggested.

The firms can rebut that presumption, the OCC said, "given the issuer provides sufficient evidence to the contrary."

On the controversial point of rewards, the industry has worked under an assumption that the GENIUS Act's ban on yield or rewards offered by stablecoin issuers doesn't extend to third parties that can offer their own rewards programs on those issuers' tokens, such as at Coinbase. But the OCC's proposed language assumes that the law's prohibition would be improperly evaded under certain third-party relationships, though the details are still being studied by crypto lobbyists and lawyers.

Industry insiders who requested anonymity acknowledged this opening effort looks bad, and they'll line up to try to get it changed, but some suggest the agency's wording may leave enough room that continued rewards could be manageable.

Todd Phillips, a former lawyer at the Federal Deposit Insurance Corp. and business professor in Georgia who tracks digital assets policy, agreed the proposed language doesn't seem like a hard no.

"I think there's some play in the joints of what the OCC has proposed," Phillips told CoinDesk on Thursday. He said the opening language seems uncertain on whether it means to "shut down all permutations of stablecoin rewards."

"The OCC has clearly gone beyond what the statute requires," Phillips said, adding that the extent of the restriction "is open to debate."

The agency didn't immediately respond to questions from CoinDesk.

The crypto industry's primary policy aim in Washington is to advance the Clarity Act's regulations for the overall U.S. digital asset markets. In that legislative negotiation, this issue of stablecoin yield has become one of the leading points of contention, with U.S. bankers arguing that such yield threatens their foundational dependence on customer deposits. During those talks, the crypto side has repeatedly argued that the GENIUS Act, as it stands, allows third party crypto firms to offer rewards on stablecoin holdings and activities.

One of the insiders in the negotiation told CoinDesk on Thursday that the OCC's action should undermine the banks' lobbying, because what's the point of hashing out stablecoin yield in further legislation when the banking regulator has already taken it up as a proposed rule? Despite that, they also said the OCC overreached, and the industry will likely fight the proposed rulemaking even as the Clarity Act continues its way through Congress.

Meanwhile, the proposals advanced by Gould — a former chief legal officer at Bitfury who has otherwise been strongly supportive of the crypto industry — casts some doubt on industry confidence that GENIUS will protect stablecoin rewards programs, which represents a significant business at Coinbase. The U.S. crypto exchange hasn't yet made any public statements, and a company spokesperson declined to comment.

The proposed rulemaking from the OCC, which charters and oversees national banks and trusts in the U.S., is preliminary, opening the ideas to a public comment period that would later have to be followed up with a final rulemaking process. With controversial rules, this process usually requires months of discussion and review.

If the OCC does cut off the ability of crypto platforms to extend stablecoin yield to customers, it may eliminate one of the Clarity Act sticking points, though other matters are also still standing in the way of the bill. Democratic lawmakers have insisted — for instance — that the legislation address potential conflicts of interest posed by senior government officials, such as President Donald Trump, personally profiting from the crypto industry.

At a Thursday hearing before the Senate Banking Committee, stablecoin rewards came up often as a business that scares the banking industry. Regulators suggested they haven't yet seen a flight of deposits from banks.

"We have to take these concerns, the concerns of community banks, especially seriously," said Senator Angela Alsobrooks, a Democrat who sought to negotiate a compromise in the Clarity Act to ban the crypto industry from rewards on stablecoin holdings in a way that resembles a deposit account. So far, negotiations among the political parties, the banks, the crypto industry and the White House haven't yet advanced to a compromise that can get to a vote in the Senate.

Read More: OCC pitches stablecoin rules as U.S. Senate holds banking hearing in which crypto stars

StablecoinsCoinbaseOffice of the Comptroller of the CurrencyRegulationsMarket Structure Legislation

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