US Banks Object to New Stablecoin Rewards Rule

The American Bankers Association objected on October 21 to the OCC’s final rule implementing the GENIUS Act’s ban on payment stablecoin issuers paying interest or yield solely for holding, using or retaining a token. The rule, effective January 18, 2027, covers permitted payment stablecoin issuers and foreign issuers under OCC jurisdiction. It drops a February proposal’s rebuttable presumption that certain affiliate and third-party reward arrangements would be breaches. ABA president and chief executive Rob Nichols said the rule lacks safeguards and could let issuers provide economically equivalent returns while staying outside the prohibition, and he criticized addressing deposit flight after harm occurs.