Banks Flag Concerns Over Stablecoin Yield Loophole in OCC's GENIUS Act Draft Rule

Banks are raising concerns about a potential stablecoin yield loophole in the OCC's draft rule implementing the GENIUS Act, American Banker reports. While the law prohibits stablecoin issuers from paying yield directly, analysts say third-party platforms could still operate rewards programs that resemble yield. Bank trade groups argue such arrangements might effectively recreate stablecoin yield and shift customer funds away from traditional lenders, with Treasury advisers estimating as much as $6.6 trillion in deposits could be exposed to this shift toward crypto platforms.