GENIUS Act, CLARITY Act, CEA Report on Stablecoin Yield

April 21, 2026

Stablecoin Yield Saga Continues: OCC, Congress, and the White House Weigh In

Christopher Bosch, A.J.S. Dhaliwal, Maxwell Earp-Thomas Sheppard, Mullin, Richter & Hampton LLP + Follow Contact LinkedIn Facebook X ;) Embed

A potential conclusion to the hotly contested stablecoin yield issue is coming into focus. A series of recent federal actions, including the Office of the Comptroller of the Currency’s (OCC) February 25, 2026 Notice of Proposed Rulemaking to implement provisions of the GENIUS Act, the Senate’s most recently proposed CLARITY Act language, and an April 8, 2026 report from the White House Council of Economic Advisers (CEA), reflects a growing policy push to establish a clear consensus on how, and whether, authorized payment stablecoin issuers may offer “yield” to stablecoin holders.

The OCC’s February NPRM takes a broad view of the GENIUS Act’s prohibition on paying “yield” in connection with holding payment stablecoins, in the context of OCC-supervised institutions and their affiliates (previously discussed here). While the GENIUS Act generally prohibits stablecoin issuers from providing interest-like returns in connection with holding payment stablecoins, it does not expressly address whether affiliates or other “related third parties” may provide yield that is indirectly funded or supported by the issuer. The OCC’s proposal would treat such arrangements as inconsistent with the GENIUS Act’s prohibition on yield payouts—effectively closing what some have referred to as the “affiliate loophole.”

Meanwhile, Congress continues to evaluate the scope of permissible stablecoin-related incentives under the CLARITY Act. Recent draft discussions suggest a potential compromise that would preserve the core prohibition on yield tied to passive stablecoin holdings while permitting a narrower carveout for rewards linked to specific payment or platform activity. For example, activity-based rewards tied to things like transactions, payments, transfers, conversions, and/or similar transaction-based activities would be permitted, though until “active use” and the scope of permissible returns are finalized, the dividing line remains a moving target. Although formal language has yet to be finalized, early reactions suggest the framework may represent a workable middle ground for both regulators and industry participants. Initial industry reaction was sharply negative, but sentiment has since shifted, with some participants beginning to signal openness to the framework.

A primary rationale for prohibiting stablecoin yield is that competitive returns could shift funds out of traditional bank accounts and into stablecoins, reducing credit availability because reserves are held in highly liquid assets rather than used for lending. However, the White House CEA report casts doubt on this assumption, suggesting that while a ban on passive yield could meaningfully impact consumers, its effect on bank deposit stability and lending capacity may be limited. Together with the Senate’s proposed compromise, these findings suggest that a categorical prohibition on stablecoin yield may be less likely than earlier proposals indicated.

The stablecoin yield debate reflects a broader tension between banks and the crypto industry over who holds customer funds. The emerging framework appears to draw a line between passive holding and active use, limiting yield on the former while potentially allowing incentives tied to the latter. If enacted, the CLARITY Act and related rulemaking will likely clarify where that line is drawn.

Putting It Into Practice: Stablecoin issuers, fintech partners, and program managers should continue to evaluate incentive structures with a focus on how regulators are likely to characterize the underlying economic arrangement. Transaction-based incentive programs, such as rewards tied to payments activity, may remain viable, but will require careful design to ensure they are not viewed as a proxy for prohibited yield. Much will depend on the final language of the CLARITY Act. Companies should prepare to review existing and proposed incentive programs, update product disclosures, and begin discussions with counsel to align program design with regulatory expectations.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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