US banking advocacy groups are challenging the Office of the Comptroller of the Currency’s final rules for implementing the GENIUS Act, arguing that the regulator’s approach to stablecoin yield departs from what Congress intended.
The American Bankers Association said the finalized framework includes some positive elements, but it remains opposed to changes that, in its view, soften restrictions on indirect yield-like arrangements for payment stablecoins.
Dispute centers on yield restrictions
At the center of the dispute is the GENIUS Act’s ban on yield payments tied to payment stablecoins. According to the ABA, the OCC removed a provision from the final rule that would have created a presumption that certain third-party structures violate that statutory prohibition.
The banking group said that by dropping that presumption, the OCC weakened a safeguard aimed at preventing issuers from using outside parties to replicate the economics of yield without explicitly labeling it as such.
Banks warn of a loophole through partners
In the ABA’s view, the final rule opens the door for payment stablecoin issuers to offer economically equivalent yield through affiliates, exchanges, distributors, and similar partners while still technically avoiding the law’s ban.
The association argues that these indirect arrangements could achieve the same practical result as a prohibited yield payment, even if the benefit is routed through a third party rather than paid directly by the issuer.
Why the industry groups say it matters
The ABA contends that the missing restriction does more than create a compliance ambiguity. It says the change risks erasing the line Congress intended to draw between payment stablecoins and traditional bank deposits.
That distinction matters to banks because deposits help fund lending activity. The group warned that if payment stablecoins can effectively mimic interest-bearing deposit products through affiliate or distribution arrangements, the result could threaten a funding base banks use to make loans across the US economy.
What is confirmed so far
The criticism, as described in the source report, is focused on the OCC’s final interpretation of the GENIUS Act rather than on a new law or enforcement action. The ABA acknowledged that the final rules contained several positive steps, but it singled out the treatment of yield-related provisions as a key remaining problem.
For now, the confirmed next step is continued pressure from banking advocacy groups over how the stablecoin law is applied in practice. Their challenge centers on whether the OCC’s final rule faithfully enforces Congress’s prohibition on yield, especially when issuers rely on third-party distribution and affiliate structures.
Source: cointelegraph.com