OCC Calls on Banks to Enter the Stablecoin Payment Space

Key Points of This Article

• Recommendation for the development of stablecoin functions based on the Genius Act
• Ongoing discussions on indirect yield provision

OCC Encourages Stablecoin Development

On the 26th, the Office of the Comptroller of the Currency (OCC) called on community banks in the U.S. to develop functions related to payment stablecoins, based on the "National Innovation Guidelines and Establishment Act for U.S. Stablecoins (Genius Act)."

It is recommended that banks or their subsidiaries consider applying to become authorized issuers of payment stablecoins. This is also stated to complement the OCC's "Community Bank Revival" initiative, which reviews the regulation and supervision of community banks.

On the 21st, the OCC announced the final rule regarding the regulation of payment stablecoins under the "Genius Act." This final rule is expected to take effect on January 18, 2027, the same date as the implementation of the Genius Act.

The rule stipulates requirements for stablecoin issuers, issuers of foreign stablecoins, and certain custody operations conducted by entities under OCC supervision.

Removal of Yield-Related Hurdles

The Genius Act prohibits issuers from providing yields or interest on stablecoins themselves. However, organizations such as the American Bankers Association (ABA) have pointed out that stablecoins circulate through intermediaries such as exchanges, which may indirectly provide yields.

In this regard, the OCC stated in the final rule that "payment stablecoins are still in an early market phase, and it is not appropriate to introduce a 'rebuttable presumption' regarding the yield prohibition at this time."

The "rebuttable presumption" is a mechanism that presumes an issuer is in violation of the yield prohibition if it has contracts with affiliates or related third parties to pay interest or yields, and those parties have contracts to pay yields to stablecoin holders solely for holding, using, or maintaining the stablecoins.

Unless the issuer can rebut this presumption, it will be treated as a violation. The OCC removed this item from the final rule, which was included in the proposal stage. However, the OCC maintains its authority to address avoidance behaviors and plans to review related contracts through licensing examinations and supervision.

Rob Nichols, President and CEO of the American Bankers Association (ABA), expressed disagreement with the OCC's removal of the "rebuttable presumption." He is concerned that stablecoin issuers may be able to indirectly provide equivalent yields while circumventing legal prohibitions.

Nichols commented that this could threaten the source of bank lending, which is a driving force of the U.S. economy.

Traditional U.S. banks have long argued that the provision of yields on stablecoins could lead to a flow of funds from bank deposits to stablecoins. Indirect yields have also been a focus of the Clarity Act proposal.

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