Controversy over US OCC stablecoin rule proposal…Could it put the brakes on reward models?

Concerns have emerged that the crypto industry’s reward models could be curbed after the US Office of the Comptroller of the Currency (OCC) unveiled a proposed rulemaking for stablecoins.

According to CoinDesk on the 26th (local time), the OCC released a 376-page draft rule to implement the GENIUS Act—short for the Guiding and Establishing National Innovation for U.S. Stablecoins Act—enacted last year. The industry believes the draft could limit stablecoin interest and reward structures.

The proposal states that if there is a close financial relationship between an issuer and a crypto platform, “an issuer’s interest or profit payments are likely to be interpreted as being made through an intermediary or as an attempt to circumvent the GENIUS Act’s prohibitions.” This has prompted interpretations that it could affect reward programs run by third-party platforms such as Coinbase.

Until now, the industry had viewed the GENIUS Act as banning only direct interest payments by issuers, while allowing third-party rewards. However, the OCC draft suggested that certain arrangements could be treated as circumvention attempts. It also said that an issuer can rebut that presumption by providing sufficient evidence.

Todd Phillips, an attorney and former FDIC official, said, “It is unclear whether the intent is to block all forms of stablecoin rewards across the board,” adding that “the scope of the restrictions remains debatable.”

The controversy is also expected to become a variable in negotiations over the Senate’s Digital Asset Market Clarity bill (the Clarity Act). Stablecoin rewards have been cited as a key point of contention between banks and the crypto industry.

The OCC rule is currently in the public comment phase, and finalization is expected to take several months.