ABA Challenges OCC Stablecoin Rules Over GENIUS Act Rewards Loophole

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The American Bankers Association (ABA) has raised concerns over the Office of the Comptroller of the Currency’s (OCC) final cryptocurrency rules under the GENIUS Act. The ABA claims the rules create a loophole that lets crypto platforms offer interest rate news through third-party reward structures. While the rule bans direct interest payments from stablecoin issuers, it removes a proposed presumption against indirect reward models. This shift could allow crypto firms to attract deposits away from banks, reducing lending capital. Regulators will now assess such arrangements on a case-by-case basis.

The American Bankers Association (ABA) accused the Office of the Comptroller of the Currency (OCC) of weakening Congress’s stablecoin safeguards after the regulator finalized rules implementing the GENIUS Act on Wednesday. The dispute centers on whether crypto platforms can offer rewards through third-party arrangements.

The final ruleprohibits stablecoin issuers from directly paying interest but removes a proposed presumption that certain third-party arrangements could violate the law. Regulators will assess these arrangements individually.

Banks Warn of Lending Risks

ABA CEO Rob Nichols said the decision conflicts with “Congress’s clear intent to protect local lending.” He warned that stablecoin rewards could draw deposits away from banks and reduce funds available for loans.

Related: UK FCA Opens DeFi and Crypto Consultations Ahead of 2027 Rules

Investment bank TD Cowen also criticized the decision, citing uncertainty until courts clarify which practices are permitted. Future regulatory leadership could interpret the rules differently.

Crypto Industry Welcomes Decision

The Blockchain Association welcomed the change, saying it “brings the final rule more closely in line with the statutory text.” The group argued that the approach supports competition and dollar-backed payments.

The OCC also introduced revised reporting forms requiring weekly reserve information and quarterly financial reports. Pending federal approval, weekly reporting would begin January 25, 2027, followed by quarterly reporting on March 31.

Public comments on the revised forms will remain open for 30 days after Federal Register publication. Separate anti-money-laundering and sanctions requirements are not covered by Wednesday’s final rule.

Related: Trump Targets Crypto Scams, But Who Protects Investors in His TRUMP Coin?

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