OCC Floats Stablecoin Yield Rules—Will They Hurt Coinbase?

New stablecoin yield rules proposed by the Office of the Comptroller of the Currency on Thursday could jeopardize Coinbase's flagship USDC rewards program, which delivered $1.3 billion in revenue last year. The OCC's sweeping 376-page proposed rulemaking spells out how the agency intends to enforce the GENIUS Act, signed into law by President Donald Trump last summer, and includes provisions restricting how stablecoin issuers and their partners distribute yield to token holders.

What Do the OCC's Stablecoin Yield Rules Prohibit?

The OCC's proposed regulations target arrangements in which stablecoin issuers work with third-party platforms to pass yield to holders in connection with their "holding, use, or retention" of the tokens. That description closely mirrors the existing partnership between USDC issuer Circle and Coinbase, in which the two firms share revenue generated from USDC's underlying reserves. Coinbase currently pays users approximately 4% yield on their USDC deposits, functioning as a de facto interest payment.

The proposed rules are subject to a 60-day public comment period, meaning the crypto industry and banking sector both have the opportunity to submit feedback before the provisions are finalized. Several crypto policy leaders said the language could impact Coinbase's USDC rewards arrangement, though they stressed the rule's complexity and the likelihood that it could be restructured.

Industry Reaction Splits Between Praise and Alarm

Reaction from the digital assets sector has been sharply divided. Scott Johnsson, a finance attorney and crypto-focused venture capitalist, said the proposed language "most likely does" affect Coinbase's USDC rewards program. However, Johnsson expects the rule will face significant pushback and be revised before taking effect.

On the other side, Circle's leadership expressed support for the OCC's direction. Jeremy Allaire, Circle's CEO, praised the proposal publicly. "This is all part of accelerating U.S. leadership in transforming the economic and financial system and rebuilding it natively on the internet," Allaire said. Circle's head of global policy similarly commended the agency.

Coinbase did not immediately respond to a request for comment. The exchange cited its USDC rewards program as its primary growth driver in 2025, reporting $1.3 billion in stablecoin revenue last year. One policy expert noted that Coinbase was likely always going to need to adjust its rewards structure at least somewhat once the GENIUS Act took effect.

This is all part of accelerating U.S. leadership in transforming the economic and financial system and rebuilding it natively on the internet.

— Jeremy Allaire, CEO of Circle

Banking Lobby Sees Loopholes in the Proposal

The banking industry is not reassured by the OCC's proposed restrictions. A banking industry source said the announcement does not provide much comfort, underscoring a long-running concern that stablecoin yield products could siphon customers from traditional, low-yield bank accounts. The banking lobby has spent months pushing to restrict stablecoin rewards as part of broader crypto legislation negotiations.

"It really doesn't solve the problem," the banking source said, pointing to potential loopholes in the OCC's framework. The source emphasized that rulemakings "can always be changed" and that the banking industry would prefer permanent restrictions on stablecoin yield enshrined in federal law rather than regulatory guidance that a future administration could revise.

What This Means for the Stablecoin Yield Debate

The OCC's proposal arrives amid stalled negotiations between banking and crypto representatives over stablecoin yield provisions in the pending market structure bill. White House-led meetings aimed at brokering a deal by this weekend are unlikely to produce agreement in time, according to reporting from Friday.

Todd Phillips, a law professor at Georgia State specializing in bank regulation, argued that the OCC's rules will not resolve the underlying conflict. "This doesn't fix the debate," Phillips said. "This is not going to satisfy the two warring sides." Meanwhile, a bipartisan group of lawmakers introduced a separate bill on Thursday that would exempt certain decentralized software developers from criminal liability, adding another layer to the evolving regulatory landscape in Washington.

For Coinbase and its competitors, the path forward hinges on the 60-day comment period and whether final rules preserve the prohibitions on third-party yield-sharing arrangements. With $1.3 billion in stablecoin revenue on the line, the stakes for the largest U.S. crypto exchange could hardly be higher.