OCC’s Stablecoin Reward Prohibitions Need Tightening, Banks Say

Payment stablecoin companies should be subject to tight restrictions on issuing yield and other rewards under a key federal banking regulator’s first-of-its-kind stablecoin rule, banks and state supervisors said.

The Office of the Comptroller of the Currency’s proposal doesn’t go far enough to prevent deposits from leaving traditional banks in favor of stablecoins that could pay higher rates, banking trade groups said in comments due May 1.

“Despite statements by the OCC that it has the tools to address deposit flight if it begins, the OCC has not identified any tools that would enable it to do so,” the Bank ...