The regulatory tug-of-war in the United States shows no sign of slowing down, and this time the battle lines are drawn directly between traditional banking and regulators over the realm of stablecoins. Recently, the American Bankers Association (ABA) spoke out to sharply criticize the newly finalized rules by the Office of the Comptroller of the Currency (OCC) regarding the issuance and custody of payment stablecoins.
Although the banking group acknowledged that the regulations—designed to implement the GENIUS Act—included "several positive steps," the main bone of contention remains the provisions regarding financial yield.
The Loopholes Worrying Traditional Banking
At the heart of the conflict is the fact that the OCC removed a key provision that would have established a presumption that certain third-party arrangements violated the law's ban on yield payments. By dropping these originally proposed safeguards, the final rule allows payment stablecoin issuers to offer an economically equivalent yield while technically dodging the legal ban.
From the ABA's perspective, this leaves open dangerous loopholes that threaten to blur the line Congress attempted to draw between stablecoins and traditional bank deposits. In the organization's own words, this puts the funds that banks use to issue loans driving the U.S. economy at risk.
The Bank Policy Institute echoed these concerns, warning that omitting the presumption on yield substitutes clarity with ambiguity and opens the door to a massive deposit outflow that could jeopardize the financial system and its customers.
Divided Voices in the Sector
Conversely, the crypto industry views the matter entirely differently. The Blockchain Association endorsed the OCC's change regarding the yield ban, arguing that the move brought the final rule closer to the actual legal text.
This debate over stablecoin rewards has been a constant headache for lawmakers since the GENIUS Act passed Congress, and it now intersects with stalled discussions surrounding the Digital Asset Market Clarity Act, a market structure bill that stalled after a failed procedural vote in the Senate last month. Meanwhile, other key government departments, including the Federal Reserve and the Treasury, are expected to release rules on aspects of the GENIUS Act under their respective purviews ahead of the law's full implementation in January 2027.
Final Thoughts
The clash between traditional banking and stablecoin issuers reflects the inevitable tension of a financial system in transition. Banks fear losing their monopoly over deposits to more attractive digital alternatives, while the crypto ecosystem pushes to ensure innovation isn't stifled by excessive regulatory locks.
