Fed Proposes New Limits on Stablecoin Rewards: Which Programs Could Remain?
The Fed’s new proposal would treat some stablecoin rewards offered through third parties as prohibited interest or yield payments.
The Federal Reserve (Fed) opened two proposed rules under the GENIUS Act for public comment on September 24. One of the proposals, which have entered a 60-day comment period, addresses not only capital and reserve requirements for stablecoin issuers but also the rewards offered to users.
The GENIUS Act already prohibits issuers from paying interest or yield for holding stablecoins. The new proposal, however, establishes a presumption that certain arrangements involving third parties would also count as prohibited payments. The Fed says this approach is consistent with the proposal from the Office of the Comptroller of the Currency (OCC).
Not every rewards model falls under the same rules
According to CoinDesk’s assessment, regulators’ approach could leave room for crypto platforms to offer limited rewards programs similar to credit card incentives. This does not mean that all stablecoin rewards are permitted or that any particular platform’s program has been approved; the rules are not yet final.
How much platforms such as Coinbase can reward stablecoin users was one of the points of disagreement in discussions over the Digital Asset Market Clarity Act. According to the source, efforts to change the GENIUS Act’s rewards provisions through that bill did not succeed, leaving the existing law as the primary framework for this area.
The rules will not take effect immediately after the comment period
The Fed may revise the proposals after reviewing public comments and publish final versions. The 60-day period is not the date when the rules will be finalized or take effect; the rulemaking process can take months.
The reserve and capital requirements covered in our [earlier Fed report](https://koinbulteni.com/fed-odeme-stablecoinleri-icin-yeni-rezerv-sarti-onerdi-hangi-varliklar-kullanilabilecek-287879.html) are also included in the first proposal. The second proposal sets out the process for Fed-supervised banks to apply to issue their own stablecoins, including submitting a business plan, financial information, and relevant policy documents.
Fed Governor Michael Barr emphasized that stablecoins must be redeemable quickly and at par, not only under normal conditions but also during market stress or when an issuer encounters difficulties.