The Office of the Comptroller of the Currency published a 376-page proposed rulemaking on February 25, 2026, laying out how it intends to implement the GENIUS Act for payment stablecoin issuers. Buried in the dense regulatory language is a provision that has sent tremors through the crypto industry: a near-blanket prohibition on stablecoin yield, backed by a rebuttable presumption that treats third-party reward programs as potential evasion. Coinbase, which reported $1.3 billion in stablecoin revenue last year and currently offers approximately 4% yield on USDC deposits, appears to be the most exposed player.
A 376-Page Blueprint for Stablecoin Banking
The proposed rule, designated NR-OCC-2026-9, covers the full regulatory architecture for "permitted payment stablecoin issuers" under the OCC's jurisdiction. It addresses reserve requirements, capital adequacy, custody obligations, and the relationship between issuers and the national banking charter. Acting Comptroller Jonathan V. Gould framed the proposal as seeking "feedback on the proposal to inform a final rule that is effective, practical and reflects broad industry perspective."
But the section attracting the most scrutiny is the yield prohibition. The GENIUS Act itself bans issuers from paying "any form of interest or yield" to holders "solely in connection with the holding, use or retention" of a payment stablecoin. The OCC's proposed rule goes further, creating an enforcement mechanism: a rebuttable presumption that any arrangement between an issuer and its affiliates or related third parties that results in payments to stablecoin holders constitutes a violation.
In plain language, if Circle pays Coinbase to distribute USDC, and Coinbase passes a portion of that to users as "rewards," the OCC's default position is that this arrangement violates the yield ban. The burden falls on the issuer to prove otherwise through written submissions.
Why Coinbase Has the Most to Lose
Coinbase's USDC rewards program is not a side feature. It is a strategic cornerstone. The exchange reported $1.3 billion in stablecoin revenue in 2025, driven in large part by the distribution agreement with Circle. Under that arrangement, Coinbase earns a share of the yield Circle generates from USDC reserves, most of which sits in U.S. Treasury bills and money market funds. Coinbase then passes a portion to users, currently at a rate of roughly 4% APY on USDC holdings.
The OCC's rebuttable presumption targets exactly this structure. The proposed rule flags "close financial ties between issuers and crypto platforms" as a trigger for the presumption. Coinbase's publicly documented revenue-sharing agreement with Circle, which accounted for $448 million in distribution costs in Q4 2025 alone, is precisely the type of arrangement the rule is designed to scrutinize.
Circle, for its part, has praised the OCC's proposal as advancing U.S. economic leadership. That response is notable: Circle generates revenue from reserve yield regardless of whether downstream rewards programs survive. Coinbase does not have that luxury.
The Rebuttable Presumption: How It Works
The legal mechanism is worth understanding because it shifts the burden of proof. Under a normal enforcement approach, the OCC would need to prove that a yield arrangement violates the GENIUS Act. Under a rebuttable presumption, the OCC assumes the violation exists, and the issuer must demonstrate compliance.
Issuers can rebut the presumption through written submissions showing that their arrangements are "not prohibited and not an evasion." But the standard is ambiguous. The proposed rule does not define what evidence would satisfy the rebuttal, leaving significant discretion to OCC examiners.
Todd Phillips, a former FDIC lawyer, told Decrypt that "there's some play in the joints of what the OCC has proposed," suggesting the language may not definitively shut down all reward structures. Industry sources have described the language as "looks bad" while noting that ambiguity could permit continued rewards programs if issuers document their arrangements properly.
The distinction matters for anyone earning stablecoin yield through crypto platforms. If the final rule maintains the rebuttable presumption in its current form, platforms will need to restructure their rewards as something other than yield pass-throughs, or prove to regulators that they qualify for an exception.
What This Means for USDC Holders and Crypto Card Users
The ripple effects extend beyond Coinbase's balance sheet. Multiple crypto card programs offer USDC-funded spending with yield features. Cards that let users hold stablecoins and earn passive returns while spending would face the same regulatory pressure if their yield originates from an issuer's reserve income passed through intermediaries.
For users currently earning 4% on USDC through Coinbase, the practical risk is that rates drop or the program restructures. Coinbase could pivot to framing rewards as promotional incentives, loyalty points, or trading fee rebates rather than yield, though each alternative carries its own regulatory complexity.
The broader stablecoin market, with USDC supply sitting near $75 billion as of late February 2026, could see competitive shifts. Issuers operating outside OCC jurisdiction, including offshore stablecoin providers, would not face the same restrictions, potentially creating a regulatory arbitrage that pushes yield-seeking users toward less regulated alternatives.
Crypto card providers that rely on cashback rewards funded by interchange revenue rather than stablecoin yield would be unaffected. The OCC's proposal targets the specific mechanism of yield pass-through from reserve income, not rewards funded by merchant processing fees. Cards from providers like Crypto.com or Bybit that fund rewards through interchange or token economics operate under a different model entirely.
The 60-Day Clock and What Comes Next
The comment period runs 60 days from Federal Register publication, giving industry participants until late April to submit feedback. Given the stakes, expect a flood of comment letters from Coinbase, Circle, trade associations, and banking groups.
The crypto industry's lobbying apparatus has grown substantially since the GENIUS Act's passage. Coinbase alone spent over $50 million on federal lobbying and political contributions in the 2024 election cycle. Whether that spending translates into meaningful changes to the proposed rule will become clear during the comment and revision process.
The OCC also carved out Bank Secrecy Act, anti-money laundering, and sanctions regulations from this proposal, stating those would be handled separately by the Treasury Department. That means the full regulatory picture for stablecoin issuers is still incomplete, and additional rules could layer on further requirements.
For the US crypto card market, the proposed rulemaking is a reminder that regulatory clarity cuts both ways. The GENIUS Act gave stablecoins a legal framework, but the implementing rules are where the real boundaries get drawn. A 4% yield on USDC that felt like a guaranteed feature a month ago now sits inside a 60-day window of uncertainty.
FAQ
Does this rule ban all stablecoin yield immediately? No. This is a proposed rule, not a final rule. It opens a 60-day comment period before the OCC can finalize anything. Even if adopted as written, issuers can attempt to rebut the presumption by demonstrating their arrangements do not violate the GENIUS Act's yield prohibition.
Will my Coinbase USDC rewards disappear? Not yet. Coinbase has not announced any changes to its USDC rewards program. The company will likely submit comments opposing the proposed language and may restructure its program to comply with whatever final rule emerges. Any changes would take months to materialize.
Are other stablecoin yields affected? The rule targets payment stablecoin issuers under OCC jurisdiction. DeFi protocols offering yield through lending or liquidity provision operate differently and are not directly covered by this proposal. However, centralized platforms that pass through issuer yield to users face the same scrutiny as Coinbase.
How does this affect crypto card rewards? Cards that fund rewards through interchange fees, token economics, or promotional budgets are unaffected. Only yield derived from stablecoin reserve income and passed to users through intermediary arrangements falls under the proposed ban.
Overview
The OCC's 376-page proposed rulemaking to implement the GENIUS Act includes a rebuttable presumption against stablecoin yield pass-throughs that directly threatens Coinbase's $1.3 billion stablecoin revenue stream. The rule would treat arrangements between issuers and affiliated third parties that result in user payments as presumptive violations of the yield ban, shifting the burden of proof onto issuers. A 60-day comment period gives the industry a narrow window to push back before the rule is finalized. For stablecoin holders earning yield through centralized platforms, the regulatory ground just shifted.
Recommended Reading
- The OCC Just Fired the Starting Gun on GENIUS Act Rulemaking, and National Banks Now Have a Path to Issue Stablecoins
- Circle Posts $770 Million in Q4 Revenue and 77 Percent Growth, but the $448 Million It Pays Coinbase to Distribute USDC Is the Number Wall Street Cannot Ignore
- Senate Democrats Meet on Stablecoin Yield Three Days Before the March 1 Deadline That Could Kill the CLARITY Act
