consideration) to a holder of a payment stablecoin issued by the Stablecoin Issuer solely in connection with the holding, use, or retention of such payment stablecoin. In a “white-label” arrangement where a Stablecoin Issuer issues payment stablecoins on behalf or under the branding of a third-party, the Proposed Rules provide that the rebuttable presumption would be triggered only to the extent the payment stablecoin holder holds the third-party’s white- labeled payment stablecoin (as opposed to other payment stablecoins issued by the Stablecoin Issuer). The OCC’s rationale for this rebuttable presumption is that, under these circumstances, the close nexus between a Stablecoin Issuer’s payments and payments to the payment stablecoin holder as well as the close contractual or control relationship between the Stablecoin Issuer and the other party would make it “highly likely” that the Stablecoin Issuer’s payments of interest or yield would be made to the holder through an intermediary or an attempt to evade the GENIUS Act’s prohibition on interest and yield payments. The OCC noted that other arrangements that are not captured by the presumption may also violate the statutory prohibition, or constitute an evasion thereof, and will be considered by the OCC on a case-by-case basis. To this end, the Proposed Rules would also prohibit engaging in any activity that the OCC determines is an evasion of the requirements of the GENIUS Act or the Proposed Rules. Although the OCC will retain this anti-evasion authority, it will be at the OCC’s discretion to employ it. The Proposing Release clarifies that the yield prohibition is not intended to prevent a merchant from independently offering a discount to a payment stablecoin holder for using payment stablecoins or a Stablecoin Issuer from sharing in the profits derived from the payment stablecoin with an unaffiliated partner in a white-label arrangement. To rebut the presumption, a Stablecoin Issuer could, for example, submit written materials that, in the OCC’s judgment, demonstrate that the contract, agreement, or other arrangement is not prohibited under the Proposed Rules and does not constitute an evasion thereof. The OCC’s broad discretionary authority and the lack of defined criteria to rebut the presumption are likely to render this area uncertain for the foreseeable future.
Other Prohibited Activities
Consistent with the GENIUS Act, the Proposed Rules would also prohibit Stablecoin Issuers from using deceptive names ( e.g., names that suggest that a payment stablecoin is legal tender or is guaranteed by the U.S. government) and pledging, rehypothecating or reusing any reserve assets. The broad prohibition on, and narrow exceptions to, pledging, rehypothecating, or reusing reserve assets highlights the structural differences between payment stablecoin issuers and banks, which employ fractional reserve lending.
Reserve Assets
The GENIUS Act requires Stablecoin Issuers to maintain identifiable reserves backing their outstanding payment stablecoins on at least a 1:1 basis. Under the Proposed Rules, Stablecoin Issuers must maintain reserve assets that:
March 2026 / Page 6
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