10-22-2026 
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TL;DR: The OCC finalized its GENIUS Act rules and dropped the proposed presumption that issuer arrangements with third-party platforms amount to prohibited yield, leaving a stablecoin rewards “loophole” that banks say threatens deposits. Meanwhile, the SEC closed comments on its Regulation Crypto proposal and cut its quorum requirement to a single commissioner, and a growing list of major companies, including Alphabet, Microsoft, and Goldman Sachs, is opting out of OKXICE’s plan to tokenize their stocks.
Key Takeaways:
- OCC’s GENIUS rules not making friends with banking sector
- SEC mulls Reg Crypto comments, shrinks quorum rules to single commissioner
- OKXICE tokenized stock rejections multiplying like bunnies
- Additional tokenized stock applicants apply
America’s banking watchdog is preserving a stablecoin rewards ‘loophole,’ while the number of Wall Street firms saying ‘no thanks’ to their stocks being tokenized by third parties is growing by the day.
The Treasury Department’s Office of the Comptroller of the Currency (OCC) has released its final rules on how to implement the stablecoin-focused GENIUS Act that President Donald Trump signed into law last year. The OCC is just one of several federal agencies that have to weigh in with their implementation plans, but the clock is ticking ahead of the January 18, 2027 deadline for GENIUS rules to take effect.
Stakeholders will want to read the OCC’s 721-page rulebook in its entirety, but we’ll highlight one major change from the OCC’s original proposal this spring. This change addresses the thorny issue of non-stablecoin-issuing third-party crypto platforms offering ‘rewards’ to their customers for either holding stablecoins or engaging in certain stablecoin-related activities on said platforms.
The original proposal acknowledged the GENIUS prohibition on stablecoin issuers offering yield/interest to token holders. The OCC therefore proposed enshrining the “presumption” that “certain types of arrangements” between issuers and non-issuers would amount to “prohibited payments of yield or interest by the issuer.”
The OCC now says that, after considering stakeholder comments, it “has determined to eliminate the rebuttable presumption from the final rule.” Since stablecoins are “a nascent market,” the presumption “could have been both overinclusive and underinclusive, capturing permissible arrangements that would have been subject to the rebuttable presumption and allowing the inference that impermissible arrangements not triggering the presumption are consistent with the yield prohibition.”
The OCC intends to “initially monitor arrangements” between issuers and non-issuers, and “where it identifies transactions that violate or evade the yield prohibition, the OCC will take action and provide the public with additional guidance regarding such actions and interpretations, as appropriate.”
Speaking on a call with reporters on Tuesday, an OCC spokesperson suggested that the regulator would act only if it observes “a clear evasion” of the rules. Otherwise, “we will just let the market develop and address it as it comes.”
Again, other agencies still have to weigh in with their own rules. For instance, the Federal Reserve’s proposed rules (issued last month) maintain the OCC’s original presumption re third-party activity. But the OCC move is yet another sign that the federal government is keen to advance the crypto industry’s preferred path forward following the Senate’s September failure to advance its digital asset market structure bill (the CLARITY Act).
One of CLARITY’s primary tripwires was the fight between crypto operators and the banking sector, which wanted to extend the GENIUS yield prohibition to third-party platforms. It wasn’t the only CLARITY stumbling block, but banks are now left hoping that their worst fears re mass deposit flight don’t now come to pass.
The American Bankers Association (ABA) issued a statement saying the OCC’s final rule “removes the OCC’s originally proposed safeguards that would have addressed indirect arrangements involving affiliates, exchanges and other distribution partners.”
This, and other “gaps” in the rules “risk undermining the distinction Congress drew between payment stablecoins and traditional bank deposits, threatening the funds banks use to make the loans that drive the U.S. economy.” The ABA said it ‘appreciates’ the OCC’s willingness to monitor the situation as it unfolds, but “attempting to address deposit flight and economic harm after it has occurred is the wrong approach.”
SEC mulls Reg Crypto comments, shrinks ‘quorum’ definition to one commissioner
Tuesday brought the close of the comment period for Regulation Crypto Assets (Reg Crypto), the Securities and Exchange Commission’s (SEC) proposed relaxation of rules governing how blockchain projects can raise cash via selling tokens to the public. In short, assuming they abide by a few modest fig leaves of propriety, blockchain projects could raise millions of dollars without first securing the SEC’s approval.
The SEC received ~200 comments on its proposed rules from both corporate and individual stakeholders, associations and lobbyists, investment advisers and managers, with submissions from both the crypto sector and Wall Street.
As you might imagine, most of the crypto submissions believe the proposed rules don’t go far enough in lowering the regulatory drawbridge. Some, like the Hyperliquid Policy Center, want the SEC to clarify that most forms of airdrops don’t qualify as ‘investment contracts’ under the Howey test for determining what is and isn’t a security, and thus qualify for the SEC’s proposed exemptions.
Others, like the Coinbase (NASDAQ: COIN) digital asset exchange, want the SEC to lift the ceiling for ‘early stage’ blockchain projects raising funds via new token sales from its current $5 million to $20 million. According to Coinbase, the $5 million cap would have meant that 278 (28.4%) of 962 closed token sales between January 2021 and September 2026 would have been excluded from the proposed exemption. Lifting the ceiling to $20 million would reduce this non-qualifying percentage to 6.3%.
Some submissions from crypto-antagonists, like former SEC enforcement director John Reed Stark, urged the regulator to “withdraw the Proposal in its entirety” to save itself from future embarrassment. Stark warned that if Reg Crypto “is adopted in anything resembling its current form, the resulting rule will be challenged immediately, and we believe a reviewing court will vacate it.”
The SEC hasn’t indicated a specific date by which it will issue its final Reg Crypto text, and the regulator has even suggested that it will continue to accept input past Tuesday’s deadline.
The final rules will require a vote by the five SEC commissioners, three of whom are currently represented by empty chairs due to President Trump’s failure to nominate any potential candidates. Fortunately, on September 30, the SEC revised its quorum requirements to allow a single commissioner—either Chairman Paul Atkins or Commissioner Mark Uyeda, both Republican-appointed—to qualify as a quorum.
The SEC concluded that this change doesn’t constitute “a substantive rule,” meaning federal rules regarding soliciting public comment ahead of such changes “are not applicable.”
As the Financial Times put it, following commissioner Hester Peirce’s recent retirement, “Atkins and Uyeda had to hastily revamp the SEC’s quorum rules to ensure that her swift exit won’t affect their ability to have their way.” It’s also “a pretty clear indication that the SEC doesn’t expect any exiting commissioners to be replaced any time soon.”
Uyeda responded to the FT’s scorn in a letter insisting that the change was made “for a reason.” Uyeda said “this is not the first time in the SEC’s 92-year history where there were fewer than three commissioners.” Absent this change, “a two-member Commission could be stymied from taking enforcement action against Wall Street firms—both sell-side investment banks and buy side—public companies and others solely for lack of a quorum.”
The other main federal agency tasked with overseeing digital assets, the Commodity Futures Trading Commission (CFTC), is in an even more depleted state, having been reduced to a single commissioner (currently, that’s chairman Michael Selig) for well over a year, with no word on if/when Trump might try to fill the CFTC’s four empty seats.
OKXICE getting left at the tokenization altar
Meanwhile, the SEC’s efforts to launch a 24/7/365 tokenized market for publicly traded U.S. stocks keeps hitting potholes. Namely, the first company to apply for the SEC’s new tokenized securities venue (TSV) category is getting the bum’s rush from a growing number of the companies whose shares it wants to tokenize.
On October 4, OKXICE, the joint venture of digital asset exchange OKX and Intercontinental Exchange Holdings (NYSE: ICE), the parent company of the New York Stock Exchange (NYSE), submitted its TSV application. OKXICE included a list of 63 companies it was looking to tokenize, only one of which indicated it would use the SEC’s ‘opt out’ provision. Said provision gives public companies 30 days to formally indicate their unwillingness to participate in this experiment (the clock starting upon receipt of the would-be tokenizer’s notice).
On October 15, OKXICE upped that list of opt-outers to nine firms. On Monday (19), OKXICE submitted new paperwork indicating that the ‘no thanks’ crowd now numbered 16 firms, nearly one-quarter of its original list. There are still roughly two weeks in which companies can reject OKXICE’s initiative, meaning that the opt-out number is likely to grow.
The seven new firms opting out are by no means technophobes, as they include Google’s parent company Alphabet (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), Western Digital (NASDAQ: WDC), and Qualcomm (NASDAQ: QCOM). McDonald’s Corporation (NYSE: MCD), Goldman Sachs (NYSE: GS), and Caterpillar (NYSE: CAT) rounded out this latest bunch of naysayers.
Former New York Gov. Andrew Cuomo, who was named OKXICE’s co-chair in June, put a positive spin on the rejections, calling them “a natural response” while insisting they were “not objections” to tokenization. Cuomo believes “there will be more” companies that don’t want to be first into this pool, preferring to sit on the sidelines and “see how it goes.”
A similar view was stated last month by the parent company of the Nasdaq exchange, which wasn’t included in OKXICE’s original (wish) list but nonetheless said it didn’t want its shares tokenized “as the consequences for liquidity, price discovery, and long-term shareholder value may not become apparent until well after the experiment is underway.”
A spokesperson for one of the early OKXICE objectors, Applied Optoelectronics (NASDAQ: AAOI), told Fortune that “at this stage, we don’t see a clear benefit to AOI or our shareholders that justifies these uncertainties.” The company also worried that allowing tokenization would lead investors to conclude that the company was endorsing the plan.
It remains to be seen what might happen should a company fail to respond to a TSV’s ‘intent to tokenize’ letter within the 30-day window. As written, the SEC’s ‘temporary’ tokenization plan includes no method for a company to change its mind after its tokenized shares begin trading, or to argue that a TSV’s notice got lost in the communications shuffle and thus responding in time wasn’t possible.
Early rejections not swaying new TSV applicants
Hiccups notwithstanding, two additional TSV applicants have since declared their intentions, including blockchain tech firm Perpetuals.com. The TSV.perpetuals.com site explains that its tokenized trading business “will be operated by Kephas Corporation,” which is Perpetual’s U.S. subsidiary. The tokenized trading will occur on Kronos X Public, a new Ethereum-compatible Layer 2 network.
Perpetuals made news in July when it signed a non-binding term sheet to “explore the potential acquisition” of Alt5 Sigma Canada. Alt5 is a subsidiary of AI Financial Corporation (NASDAQ: AIFC), a firm linked to the Trump family’s World Liberty Financial (WLF) crypto venture. Perpetuals almost immediately terminated the deal in a one-line statement. (AIFC’s Canadian unit was later sold to blockchain/fintech firm PrimeDelta.)
The other applicant is TSV LLC, which is run by Ali Abrar and Ryan Trinkle, co-founders of software engineering firm Obsidian Systems. TSV LLC will run on the privacy-focused Canton Network, which boasts the backing of Visa (NASDAQ: V), BNY Mellon (NYSE: BNY), Goldman Sachs, and USDC stablecoin-issuer Circle (NASDAQ: CRCL), among others.
Neither of these new TSV hopefuls has so far released a list of the companies whose stocks they hope to tokenize. TSV LLC noted that, as of October 19, it “has received no Notice of Issuer Objection from any issuer whose stock TSV LLC is or is at this time planning to tokenize.” Perpetuals’ October 14th notice used similar language. It’s possible that the companies are trying to avoid OKXICE’s fate by not publishing any lists of companies until it’s sure they’re on board.
FAQs
What did the OCC change in its final GENIUS Act rules?
The OCC eliminated the “rebuttable presumption” from its original spring proposal, which would have treated certain issuer and non-issuer arrangements as prohibited payments of yield or interest. The agency said the presumption could have been both overinclusive and underinclusive in a nascent market. It will instead monitor arrangements and act where it identifies violations or evasion of the yield prohibition.
Why are banks unhappy with the OCC’s approach?
The American Bankers Association said the final rule removes safeguards covering indirect arrangements involving affiliates, exchanges, and other distribution partners. It argues these gaps risk blurring the line Congress drew between payment stablecoins and bank deposits, threatening the funds banks use to make loans. The ABA said addressing deposit flight after it happens is the wrong approach.
Are the GENIUS rules settled across all federal agencies?
No. Other agencies still have to issue their own rules, and the January 18, 2027 deadline for the rules to take effect is approaching. For example, the Federal Reserve’s proposed rules, issued last month, keep the OCC’s original presumption on third-party activity.
What is Regulation Crypto, and what did commenters say about it?
Reg Crypto is the SEC’s proposed relaxation of rules letting blockchain projects raise money through public token sales without first securing SEC approval. The comment period closed Tuesday after roughly 200 submissions. Many crypto firms said it does not go far enough, with Coinbase asking to raise the early-stage fundraising cap from $5 million to $20 million, while critics like former SEC enforcement director John Reed Stark urged withdrawal, warning a court would likely vacate the rule.
Why did the SEC change its quorum rules?
On September 30, the SEC revised its rules so a single commissioner, either Chairman Paul Atkins or Commissioner Mark Uyeda, can constitute a quorum. Three of the five commission seats are empty and Commissioner Hester Peirce recently retired. Uyeda said the change was needed so a small commission would not be stymied from taking enforcement action, while the Financial Times described it as a sign that no replacements are expected soon.
What is OKXICE’s tokenization plan, and why is it facing resistance?
OKXICE, a joint venture of OKX and Intercontinental Exchange, applied on October 4 to be the first tokenized securities venue, listing 63 companies whose stocks it wants to tokenize. Sixteen companies have now opted out, including Alphabet, Microsoft, Qualcomm, McDonald’s, Goldman Sachs, and Caterpillar, with about two weeks of the opt-out window remaining. Companies cite uncertain consequences for liquidity and shareholder value, and worry that tokenization could imply their endorsement.
Watch: Blockchain revolution in big banks
