OCC Releases Stablecoin Regulatory Framework, Yield-Limiting Provisions Spark Industry Debate

The U.S. financial regulatory agency OCC (Office of the Comptroller of the Currency) recently released a proposed regulatory framework for stablecoins based on the GENIUS Act. This comprehensive regulatory document immediately became a focal point in the industry. The proposal includes 378 pages of detailed regulations, with the provisions on profit distribution sparking widespread discussion within the crypto industry due to ambiguous wording.

Key Regulatory Points Under the New Framework

This OCC proposal marks the first significant translation of the GENIUS Act from legislation in 2025 into specific enforcement rules. According to the overall design of the regulatory framework, OCC has drafted a comprehensive system covering asset custody control, capital adequacy requirements, and other routine financial regulatory provisions. Industry experts generally view most of the proposal as relatively clear, but the wording concerning profit distribution remains vague, becoming a primary focus of subsequent controversy.

This regulatory framework represents an important step toward establishing a federal regulatory system for stablecoins in the U.S., though its specific provisions leave room for future interpretation and adjustments.

Details and Controversies Surrounding Profit Restrictions

The most contentious part of the proposal involves how stablecoin issuers and their partners can provide earnings to token holders. According to OCC’s recommendations, licensed payment stablecoin issuers are explicitly prohibited from paying interest or profits to holders in cash, tokens, or other rewards, regardless of whether these earnings are solely due to holding the tokens.

OCC explicitly states in the proposal that issuers may attempt to circumvent this restriction through agreements with third parties. The framework lists possible third-party arrangements but also admits that “it is impossible to enumerate all potential cooperation models in advance.” To address this, OCC has established a presumption rule: if a relevant agreement exists and the third party is defined as an entity providing profit-related services, OCC will presume these payments violate the prohibition.

While the wording of this clause has sparked disagreement, it also leaves room for businesses to defend themselves—by providing evidence that their contractual arrangements do not fit the presumed violation pattern.

Ambiguities in Third-Party Relationships

Another issue arises in the framework’s definition of “partners.” According to the proposal, an entity could be both an issuer and a partner, but the ownership and control distinctions are unclear. Notably, the proposal introduces a shareholding threshold—if the issuer holds 25% or more of a third party’s equity, that third party will be considered an affiliated entity and thus cannot independently provide profit services.

This ownership threshold may prompt some companies to reorganize their structures to avoid related-party restrictions. Additionally, the proposal leaves room for interpretation regarding the application of “white-label” operational models, with enforceability depending on the specific contractual arrangements between issuers and service providers.

For example, PayPal and Paxos’s PYUSD arrangement exemplifies such complex structures, and these companies may need to adjust their agreements under the new framework. Major crypto platforms like Coinbase and Circle could face similar pressures to modify their operations.

Impact on Major Crypto Companies

If the proposal’s current wording is enforced, companies like Coinbase, Circle, PayPal, and Paxos may need to reevaluate their profit-sharing plans. Matthew Sigal, head of digital asset research at VanEck, publicly stated that these platforms might be forced to redesign their profit programs into loyalty-like schemes rather than direct interest payments.

This would require not only product restructuring but also legal adjustments in their partnerships. For trading platforms that rely on earnings to attract users, such changes could impact competitiveness and user experience.

Interaction Between the Regulatory Framework and the Market Structure Bill

Profit distribution issues are also a major obstacle in the U.S. Congress’s efforts to pass the Market Structure Bill. This comprehensive legislation, long awaited by the crypto industry, aims to improve regulation across trading structures, anti-money laundering rules, and customer verification.

Industry insiders suggest that OCC’s proposal could influence Congress’s stance on profit issues—some believe it might eliminate the need for explicit profit provisions in the bill. However, others argue that given the importance of profit-related concerns, Congress is unlikely to completely sidestep this topic in the legislation.

Beyond profit, disagreements remain over moral clauses (involving former President Donald Trump and his family’s crypto activities) and anti-financial crime rules, which have delayed the bill’s progress.

Uncertainty in Regulatory Implementation

OCC’s proposal is currently in a public comment period, and final rules will require further revision and refinement. Industry stakeholders are particularly concerned that if the Market Structure Bill becomes law before OCC finalizes its rules, OCC may be compelled to issue amendments or restart the rulemaking process to align with the new law.

This interaction between different legal layers adds uncertainty to the final regulatory landscape. The progress of the bill, the finalization of OCC rules, and how they coordinate will ultimately shape the future regulation of stablecoins in the U.S.

Currently, lawmakers are circulating a new version of the bill text, but consensus has not yet been reached between the financial sector and the crypto industry. Every change within this framework could significantly impact industry participants.