State Association Letter to the OCC on the Genius Act Implementation NPRM's Proposed Prohibition on Interest and Yield

To Whom it May Concern:

The American Bankers Association (ABA) and the undersigned state bankers associations (collectively, "the Associations") submit these comments on the OCC's Notice of Proposed Rulemaking (NPRM) implementing the GENIUS Act. We write specifically on the proposed prohibition on interest and yield. The proposed rule's presumption-based framework is a useful foundation, but gaps in its current design will allow issuers to deliver economically equivalent returns to stablecoin holders through third-party intermediaries. We offer targeted recommendations to close those gaps.

I. The Yield Prohibition Must Reach Indirect Arrangements

The GENIUS Act prohibits any permitted payment stablecoin issuer (PPSI) from paying "any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection ith the holding, use, or retention" of a payment stablecoin. The statute's plain language is unambiguous: the prohibition covers economic benefit in any form, regardless of how it is labeled or structured.

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