Yesterday the Office of the Comptroller of the Currency (OCC) published a 376 page document outlining rulemaking proposals for the implementation of the GENIUS Act for stablecoins. The OCC regulates stablecoins issued by national banks, foreign issuers and any stablecoin that exceeds $10 billion, making it perhaps the most important stablecoin regulator. That’s all the more so because all the major onshore stablecoin issuers including Circle, Paxos and Anchorage Digital have national trust charters, although many are still provisional.
One of the most topical issues relates to the avenues for stablecoin issuers to pay interest or yield on coins. The rulemaking expands on the GENIUS Act interest ban, including certain indirect interest payment pathways, but also highlights the potential areas for loopholes and asks how these might be addressed. At the same time the OCC doesn’t want to make the ban so broad that it precludes otherwise allowable payments. Independent payments by merchants, and payments by the issuer to share revenues with a third party for a white label stablecoin issuance, are explicitly allowed.
The regulations explicitly shut down two current workarounds. For example, Paxos is technically the issuer of PayPal’s PYUSD stablecoin, and PayPal pays rewards to PYUSD holders. In this case the issuer, Paxos, is not paying interest directly, but the regulation says this is not allowed.
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