The OCC has finalized part of the GENIUS Act’s stablecoin rules, but dropped a proposed presumption that could have swept some third-party rewards into the ban on issuer-paid yield. That leaves room for rewards programs to develop, while banks warn the approach could weaken deposit funding.
- The OCC rule takes effect January 18, 2027. Other GENIUS Act rules are still outstanding.
- Stablecoin rewards are not automatically approved. The details of each arrangement still matter.
- The SEC’s proposed fundraising exemptions drew calls for both broader relief and withdrawal of the proposal.
- More companies are opting out of OKXICE’s proposed tokenized-stock list, while other venues pursue applications.
The OCC leaves the rewards question open
The Office of the Comptroller of the Currency (OCC), a Treasury Department banking regulator, has issued a final rule implementing parts of the GENIUS Act, enacted on July 18, 2025. The rule is scheduled to take effect on January 18, 2027. It covers payment stablecoin issuance and related activities under the OCC’s jurisdiction, not every stablecoin issuer or crypto business.
The rule addresses reserve assets, redemption, risk management, audits, supervision, custody, capital and issuer applications. It does not complete the federal government’s implementation of the Act. The OCC says separate rules on Bank Secrecy Act requirements, anti-money-laundering obligations and sanctions are still to come.
The sharpest dispute concerns rewards. The GENIUS Act prohibits payment stablecoin issuers from paying holders yield or interest. A platform that is not the issuer might still offer customers rewards for holding or using a stablecoin. The legal question is whether a particular arrangement is genuinely separate from issuer-paid yield or functions as an indirect way around the prohibition.
In its spring proposal, the OCC would have created a “rebuttable presumption” that certain arrangements between issuers and non-issuer platforms amounted to prohibited issuer payments. A rebuttable presumption is a default regulatory position that applies unless evidence rebuts it. In the final rule, the OCC said it “has determined to eliminate the rebuttable presumption from the final rule, ” reasoning that it could be overinclusive and underinclusive in a young market. The OCC’s move has been described as preserving a stablecoin rewards loophole.
The OCC says it will initially monitor issuer-platform arrangements and act when it identifies violations or evasion. An OCC spokesperson said the agency would act in cases of “a clear evasion.” Otherwise, “we will just let the market develop and address it as it comes.” The agency is relying on supervision and enforcement rather than a broad advance presumption. That is not blanket approval of stablecoin rewards.
For users and platforms, relevant details include who offers and funds a reward, whether the issuer is involved, and how the arrangement works in practice. Those details can help clarify the regulatory question, but none on its own determines whether a program complies with the law. The OCC has not defined “a clear evasion” in the material described here, leaving future guidance and enforcement to establish an important boundary.
According to the proposal described in reporting, the Federal Reserve’s proposed rules retain the presumption the OCC dropped. The agencies’ approaches may diverge, though the Senate stablecoin fight also reflects wider political disagreements over U.S. stablecoin policy. The rules need to be compared carefully, since differences in the institutions and activities each agency oversees could matter.
The American Bankers Association (ABA) criticized the OCC’s decision, saying it “removes the OCC’s originally proposed safeguards that would have addressed indirect arrangements involving affiliates, exchanges and other distribution partners.” The trade group argues that stablecoin-related rewards could draw funds away from bank deposits and reduce the money available for loans. It said “attempting to address deposit flight and economic harm after it has occurred is the wrong approach.”
That is a warning about a possible consequence, not evidence that deposit flight has already occurred at a particular scale. Stablecoins and bank deposits are also different in legal terms. Reserve and redemption requirements do not, by themselves, make a stablecoin a bank deposit or give it deposit-insurance protection. The practical protections depend on the product and its structure. The possibility that restrictions on stablecoins could hand China’s digital yuan a global edge is another concern raised in the wider policy debate.
The SEC proposal: two fundraising routes, many unresolved details
Separately, the Securities and Exchange Commission (SEC) proposed Regulation Crypto Assets on August 18, 2026. The proposal would create conditional exemptions from securities registration requirements for certain offerings involving crypto assets. That means registration relief, not SEC approval of a token, a project or an investment.
The proposal sets out two distinct fundraising pathways. One would allow offerings of up to $5 million over four years. The other would allow up to $75 million in each 12-month period, subject to additional requirements, including financial statements and ongoing reporting. Both pathways would require narrative disclosures.
The SEC also proposed a conditional safe harbor and limited preemption of certain state registration and qualification requirements for covered offerings. These provisions would apply only if their conditions are met. They are not a general exemption for every token sale or distribution.
The comment period closed on a Tuesday, with roughly 200 submissions reported from crypto and traditional financial firms, trade groups, advisers, lobbyists and individuals. The comments reveal competing priorities. The Hyperliquid Policy Center asked the SEC to clarify whether most airdrops, or distributions of tokens to users, could qualify as “investment contracts” under the Howey test. That is the legal test used to assess whether an arrangement is an investment contract.
Coinbase asked the SEC to raise the proposed early-stage cap from $5 million to $20 million. In its submission, Coinbase said the $5 million limit would have excluded 278 of 962 token sales closed between January 2021 and September 2026, or 28.4%. The company said a $20 million cap would reduce the non-qualifying share to 6.3%. Those figures come from Coinbase’s analysis, not an independent SEC finding.
Not all commenters want a broader exemption. John Reed Stark, a former SEC enforcement director, urged the agency to “withdraw the Proposal in its entirety.” He predicted that if the SEC adopted a rule resembling the proposal, it would be challenged and, in his view, vacated by a court. That is Stark’s legal prediction, not a court ruling or an established outcome.
The SEC has not set a date for final rules. The key test is whether the final conditions give projects a workable way to raise capital while giving investors enough information to assess what they are buying. Registration relief alone cannot do that.
A lean SEC commission and a new quorum rule
The SEC also revised its quorum rules on September 30 so one commissioner can constitute a quorum. At the time described, three of the commission’s five seats were vacant, and Hester Peirce had recently retired. Chairman Paul Atkins and Commissioner Mark Uyeda were the remaining commissioners able to form a quorum under the revised rule.
Uyeda said the change would prevent a two-member commission from being unable to act for lack of a quorum. Without it, he warned, “a two-member Commission could be stymied from taking enforcement action against Wall Street firms, both sell-side investment banks and buy side, public companies and others solely for lack of a quorum.”
The Financial Times offered a more critical view, describing the change as a way for Atkins and Uyeda to proceed despite Peirce’s departure and as a sign that vacancies might not be filled soon. That is the newspaper’s analysis of the change’s significance. Uyeda said the aim was to ensure the commission could continue to act. The effect of the revised quorum rule on decisions and enforcement remains to be seen.
Tokenized-stock plans face issuer resistance
The debate over crypto regulation extends beyond stablecoins and fundraising. OKXICE, a joint venture between crypto exchange OKX and Intercontinental Exchange Holdings, the parent company of the New York Stock Exchange, has applied to operate a tokenized securities venue. Its October 4 filing listed 63 companies whose shares it proposed to tokenize.
Under the SEC’s temporary opt-out process, a public company has 30 days after receiving notice from a prospective tokenization venue to object. One company had indicated it would opt out when OKXICE filed. The count rose to nine by October 15 and to 16 by October 19, nearly one-quarter of the original list. The seven most recently named companies were Alphabet, Microsoft, Western Digital, Qualcomm, McDonald’s Corporation, Goldman Sachs and Caterpillar.
Former New York Governor Andrew Cuomo, named an OKXICE co-chair in June, called the rejections “a natural response” and said they were “not objections.” He suggested some companies may wait to see how the experiment develops. Applied Optoelectronics, an early objector, said it saw no clear benefit to the company or its shareholders that justified the uncertainty. It also worried that participation could be read as an endorsement. Nasdaq’s parent company, which was not on OKXICE’s original list, has also said it does not want its shares tokenized, citing possible effects on liquidity, price discovery and long-term shareholder value.
Those concerns do not prove that tokenized shares necessarily harm liquidity or shareholder value. But they underline a basic point: “tokenized stock” does not, by itself, tell you what an investor owns. The legal and technical structure matters. A token might convey share ownership, voting rights, dividends, a claim through an intermediary or only price exposure. The arrangements described so far do not establish that every tokenized product would carry the same rights as a conventionally held share.
The opt-out process also leaves practical questions unanswered. The temporary plan does not say what happens if a company does not respond within 30 days or how it could reverse course after tokenized shares begin trading. More objections may emerge as companies receive notice.
Two other prospective venues have also announced plans to apply. Perpetuals.com says its U.S. subsidiary, Kephas Corporation, would run its tokenized trading business on Kronos X Public, an Ethereum-compatible Layer 2 network. TSV LLC, run by Obsidian Systems co-founders Ali Abrar and Ryan Trinkle, plans to use the Canton Network. Neither applicant had released a list of companies it planned to tokenize. TSV LLC said it had received no issuer objection notice as of October 19. Perpetuals used similar language in a notice dated October 14. Without public lists, it is too early to tell whether these venues will face the same resistance.
Key questions on stablecoin rewards and U.S. crypto rules
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Did the OCC ban stablecoin rewards offered by third-party platforms?
No blanket ban or approval follows from the change. The OCC dropped its proposed presumption and says it will monitor arrangements for violations or evasion. The details and funding of each program still matter.
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Why are banks concerned about the OCC’s approach?
The ABA says the rule leaves gaps around indirect arrangements and could encourage funds to move from bank deposits into stablecoin-related products. That is a projected risk, not an outcome measured by the rule.
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When does the OCC rule take effect?
The OCC’s final rule is scheduled to take effect on January 18, 2027. Separate rules on anti-money-laundering, Bank Secrecy Act and sanctions requirements remain outstanding.
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Does the SEC proposal approve crypto token sales?
No. It proposes conditional exemptions from registration requirements, including a $5 million pathway over four years and a separate $75 million pathway for each 12-month period. Neither is a general endorsement of projects or tokens.
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Why are companies opting out of OKXICE’s plan?
Companies have raised concerns about uncertainty, possible effects on liquidity and shareholder value, and the risk that participation could be seen as an endorsement. The legal rights attached to a tokenized product depend on its specific structure.
The OCC has chosen case-by-case scrutiny over a broad presumption on stablecoin rewards. The SEC’s fundraising framework remains a proposal, and tokenized-stock venues have yet to settle basic questions about issuer consent and shareholder rights. Watch how regulators define indirect yield, which conditions make it into the SEC’s final rules, and whether tokenization applicants disclose their intended issuers before trading begins.
