TL;DR
- On February 26, 2026, the OCC presented a 376-page rule proposal to implement the GENIUS Act
- The proposal will prohibit all forms of interest or yield associated with payment stablecoins
- Anti-circumvention rules also target affiliate structures attempting to pass on yield to users
- Public comment period opens for 60 days; the GENIUS Act takes effect no later than January 18, 2027
OCC Puts Foot Down on Stablecoin Yield
The U.S. Office of the Comptroller of the Currency (OCC) published a detailed rule proposal on February 26, 2026, aiming to translate the GENIUS Act – passed by Congress in July 2025 – into concrete operational requirements for stablecoin issuers under OCC supervision.
The proposal spans a full 376 pages and is the most comprehensive regulatory document presented to date for payment stablecoins in the U.S., according to Cointelegraph.
Three Key Provisions
1. Prohibition on Yield
The core of the proposal is a direct prohibition on regulated issuers – including subsidiaries of national banks and federal savings associations – from paying interest or other yield “solely in connection with the holding, use, or custody” of a payment stablecoin.
2. Counteracting Circumvention
The OCC is clear that it will not accept creative structures to circumvent the prohibition. If an issuer has an agreement with an affiliated company that then passes on yield to stablecoin holders, this will automatically be presumed to violate the prohibition. Issuers can submit written documentation to rebut this presumption.
3. Strict Reserve Requirements
Regulated issuers will be required to back stablecoins one-to-one with liquid, identifiable assets, meet redemption requests within two business days, and comply with capital and risk management measures tailored to their risk profile.
What Happens to USDC, USDT, and DAI?
USDC in a Squeeze
USDC from Circle is already among the most regulation-compliant stablecoins and is widely used by institutional players. If the proposal is adopted in its current form, CeFi platforms offering passive yield on USDC holdings – and falling under OCC jurisdiction – will have to restructure their products.
Thania Charmani, a partner at the law firm Winston & Strawn, is quoted by research sources as saying that the OCC proposal aims to “resolve the yield debate through rulemaking,” and that stablecoin yield and GENIUS-compliant stablecoins will thus fall “on opposite sides of a regulatory line.”
USDT on the Regulatory Fringe
Tether largely operates outside direct U.S. banking regulation, but the proposal could still affect the company's position. If U.S. regulated entities can no longer offer yield on stablecoins, platforms may choose to favor GENIUS-compliant alternatives like USDC – and USDT could be pushed further into less regulated environments.
DAI and the DeFi Exception
For decentralized stablecoins like DAI, issued by MakerDAO through smart contracts, the direct impact of the prohibition will be more limited – as there is no single centralized issuer that the OCC can hold accountable. Nevertheless, centralized intermediaries facilitating DAI yield and subject to OCC supervision will be affected.
Banks Win – Crypto Users Lose Passive Income?
The background for the prohibition is partly that traditional banks have long argued that stablecoin yield “threatens to drain deposits from regulated institutions.” According to research sources, the consequences of the prohibition, if adopted as it currently stands, could be threefold:
Paving the Way for the CLARITY Act
An interesting side effect is that the OCC rule proposal could simplify progress for the Digital Asset Market Clarity Act of 2025 (CLARITY Act), which also touches on stablecoin yield. With the OCC already addressing the issue through its own rules, Congress can avoid lengthy yield debates in connection with the CLARITY process.
Comptroller of the Currency Jonathan Gould stated in connection with the publication that the OCC aims to facilitate “the stablecoin industry to flourish in a safe and sound manner,” and encouraged feedback during the comment period.
The comment deadline is 60 days from publication in the Federal Register, and the industry is expected to mobilize significant opposition to the yield prohibition.
