OCC withdraws 376-page GENIUS Act implementation proposal, ending 60-day public comment period.
OCC Withdraws Proposal to Implement GENIUS Act
The US Office of the Comptroller of the Currency (OCC) has withdrawn its 376-page proposal intended to implement the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. This decision comes after the publication date, which was set for public comment over a 60-day period.
Background: GENIUS Act's Purpose
The GENIUS Act, enacted in July 2025, aimed to establish a federal framework for payment stablecoins while restricting their issuance within the United States to licensed entities such as bank subsidiaries, new federal stablecoin issuers, and certain large state-regulated firms. The proposal sought to resolve the debate on yield payments through rulemaking.
Key Provisions of the OCC Proposal
The withdrawn proposal detailed operational constraints for GENIUS-authorized payment stablecoins, including strict limitations on how these entities could structure their economic arrangements. It also included a rebuttable presumption that issuers were violating the ban on paying yield if they had an arrangement with affiliates or related third parties to distribute such payments.
Impact on CLARITY Act and Coinbase
If finalized as drafted, the proposal would have significant implications for the Digital Asset Market Clarity Act of 2025 (CLARITY), which has been contentious due to its provisions around yield payments. By prohibiting issuer-level yield payments under GENIUS, the OCC's framework effectively creates a no-yield baseline for compliant payment stablecoins.
Industry Reactions and Future Outlook
Thania Charmani, partner at global law firm Winston & Strawn, commented that this move could pave the way for CLARITY to proceed without yield provisions. For companies like Coinbase, which have advocated for the ability to offer yield on stablecoin balances within a regulated framework, this development signals a clear regulatory divide between traditional financial institutions and digital asset service providers.
Conclusion
The withdrawal of the OCC's proposal marks a significant shift in the regulatory landscape surrounding US payment stablecoins. As discussions continue around CLARITY and other legislative efforts, stakeholders will need to carefully consider how these evolving rules impact their operations and business strategies.
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