The American Bankers Association said the OCC's final GENIUS Act rule dropped curbs on yield paid via affiliates and exchanges, letting issuers skirt the ban.
Key Facts
The American Bankers Association said the OCC's final GENIUS Act rule removed proposed safeguards against stablecoin yield paid indirectly through affiliates, exchanges and other distribution partners.
Payment stablecoin issuers "can provide economically equivalent yield while technically avoiding the statutory prohibition," ABA President and CEO Rob Nichols said on Wednesday.
The ABA said the gaps risk threatening the funds banks use to make loans, and that addressing deposit flight after it happens "is the wrong approach."
The American Bankers Association has criticized the Office of the Comptroller of the Currency's final rule for stablecoin issuers, saying it leaves room for issuers to offer yield through crypto platforms despite the GENIUS Act's ban.
"While the rule includes several positive steps, we disagree with the OCC's decision to move away from its original position on stablecoin yield," ABA President and CEO Rob Nichols said in a statement on Wednesday.
The result "will preserve the status quo for crypto platforms despite Congress's clear intent to protect local lending," he said.
The American Bankers Association's Oct. 21 statement on the OCC's final GENIUS Act rule. Source: American Bankers Association
ABA Says Rule Dropped Curbs on Indirect Yield
The final rule removes safeguards the OCC originally proposed for indirect arrangements involving affiliates, exchanges and other distribution partners, according to the ABA.
"As a result, payment stablecoin issuers can provide economically equivalent yield while technically avoiding the statutory prohibition," Nichols said, adding that the OCC also declined to adopt a broader presumption against arrangements designed to get around the ban.
The OCC finalized its GENIUS Act rule on Wednesday, setting standards for reserves, redemption and custody ahead of the law's Jan. 18, 2027, start date. The regulator said it would closely monitor the industry and adjust its framework "to the extent necessary." Its announcement did not address yield.
Banks Warn of Deposit Flight
Those gaps "risk undermining the distinction Congress drew between payment stablecoins and traditional bank deposits," threatening the funds banks use to make loans, Nichols said.
He welcomed the OCC's recognition that further supervisory experience may inform future action, but said "attempting to address deposit flight and economic harm after it has occurred is the wrong approach."
The ABA has pressed lawmakers and regulators on stablecoin yield for months, including a May joint trade letter urging stronger yield provisions. The Blockchain Association, a crypto industry group, this week sought clearer rules for DeFi in the GENIUS Act rollout.
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