# OCC finalizes GENIUS Act stablecoin rule

> Banks and crypto firms clash over stablecoin rewards loophole after OCC rules.
- Title: OCC finalizes GENIUS Act stablecoin rule · Startup Fortune
- Summary: Banks and crypto firms clash over stablecoin rewards loophole after OCC rules. The OCC finalized a rule that bans stablecoin issuers from paying interest but…
- Keywords: occ, genius act, stablecoin, rewards loophole, banks, crypto firms, clarity act, paypal, coinbase, usdc, pyusd, startups
- Source: Startup Fortune — https://startupfortune.com/occ-finalizes-genius-act-stablecoin-rule-as-banks-fight-a-rewards-loophole
- Published: 2026-10-22T05:47:40+00:00
- Read time: 1 min
- Topics: occ, genius act, stablecoin, rewards loophole, banks, crypto firms, clarity act, paypal, coinbase, usdc, pyusd, startups
## OCC finalizes payment stablecoin rule
The Office of the Comptroller of the Currency finalized its payment stablecoin rule under the GENIUS Act on October 21, setting federal standards for reserves, redemptions, custody, capital and audits that take effect January 18…
## Rule covers all stablecoin issuers
The rule applies to national banks, federal savings associations, and approved nonbanks, requiring issuers to hold reserves at least equal to circulating stablecoins and process redemptions within two business days.
## Bitcoin rises on news
Bitcoin rose 2.4% to roughly $84,700 on the news, with Ether and XRP also climbing.
## Stablecoin rewards loophole
The GENIUS Act bars issuers from paying interest for holding tokens, but the OCC dropped a presumption that third-party reward arrangements violate the law, allowing case-by-case review instead.
## Coinbase and PayPal use rewards
Coinbase no longer issues USDC, and PayPal's PYUSD is issued through Paxos, both companies argue their reward programs are not the 'interest' banned by Congress.
## Banks push for stricter rules
The American Bankers Association and 52 state bankers associations warned gaps in the rule could let yield-like payments reach stablecoin holders indirectly through exchanges and distribution partners.
## OCC sides with exchanges
The OCC's move to drop the presumption suggests the agency sided more with exchanges' reading than banks, meaning years of individual determinations instead of one clean rule.
## Rule locks in market standards
The rule gives the stablecoin market a single federal rulebook covering the whole lifecycle of an issuer, from reserve composition through failure scenarios.
## Key takeaway

The OCC finalized a rule that bans stablecoin issuers from paying interest but allows case-by-case review of third-party reward programs, sparking a dispute between banks and crypto firms over whether such rewards violate the GENIUS Act.