Banking Regulator Floats New Stablecoin Yield Rules—Do They Hurt Coinbase?
The Office of the Comptroller of the Currency (OCC) released preliminary rules for implementing the GENIUS Act, which targets stablecoin regulation. The draft rules would prohibit specific stablecoin reward arrangements, particularly those involving third parties passing yield to token holders. This could affect the existing USDC rewards program between Circle and Coinbase, where users earn around 4% yield on USDC. Industry experts are divided: some believe the rules would force changes to Coinbase’s program, while others see potential for workarounds or legal challenges. Crypto leaders criticized the proposal as regressive, but Circle’s leadership expressed support, framing it as positive for U.S. fintech innovation. The banking sector remains dissatisfied, arguing the proposal leaves loopholes and preferring stricter, legislated restrictions to prevent competition with low-yield bank accounts. Ongoing negotiations between financial and crypto industry representatives, led by the White House, have yet to resolve the issue, and agreement on stablecoin yield rules remains elusive.
