US Bans Interest on Stablecoins, Allows Exchange Rewards

The Office of the Comptroller of the Currency (OCC) in the United States has approved new regulations that prohibit interest payments on stablecoins. While this regulation prevents the establishment of traditional deposit structures for digital dollars, it does not completely eliminate reward programs offered by exchanges and fintech companies. The new rules will come into effect on January 18, 2027. Stablecoin issuers will not be able to pay direct income or interest on the coins held in users' wallets. The OCC is known as an institution that supervises national banks and some financial institutions. The final text withdrew a stricter provision that foresaw the automatic blocking of all payments related to stablecoins. Platforms like Coinbase, Kraken, and PayPal will continue to be able to offer rewards to users based on their stablecoin balances. However, each program will be examined individually, and audits will be conducted to prevent hidden interest distribution. Traditional banks had demanded the removal of all payments related to stablecoins, arguing that the high returns in the crypto market were diverting savings away from traditional accounts, but this demand was not met. The regulatory body granted stablecoin issuers more flexibility in reserve management. Additionally, if users attempt to convert more than 10% of the total coin supply into cash within a day, the relevant company will be required to notify authorities within 24 hours.

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