REF — Open USD vs the GENIUS Act Yield Ban

Open Standard's OUSD model (sharing reserve yield with 140 corporate partners) sits inside the most contested corner of the new U.S. stablecoin law. The GENIUS Act (Pub. L. 119-27, enacted July 18, 2025) and the OCC's proposed implementing rule (NPRM, published Feb 25, 2026) ban payment-stablecoin yield to holders — but carve out a "white-label profit-sharing with non-affiliates" path that OUSD is likely to argue it qualifies for.

Key points

• Statutory yield ban (§4(a)(11), 12 U.S.C. 5903(a)(11)): PPSIs may not pay holders "any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention" of a payment stablecoin. Payment stablecoins are not bank deposits and are not FDIC-insured.
• OCC anti-evasion presumption (Proposed 12 CFR 15.10(c)(4)): A rebuttable presumption of violation arises where (1) the issuer pays yield to an affiliate or "related third party", and (2) that party pays yield to holders. "Related third party" covers (i) persons offering to pay yield to holders as a service, and (ii) white-label partners for whom the PPSI issues stablecoins on their behalf / under their branding.
• The carve-out OUSD will rely on: the prohibition does not extend to (1) merchant discounts for stablecoin payments, or (2) profit-sharing with a partner in a white-label / commercial partnership context (non-affiliate). Open Standard's 140 partners are non-affiliates receiving a share of issuer profit — arguably profit-sharing, not yield to token holders. The OCC reserves case-by-case authority over non-affiliated arrangements that "function as yield in economic substance."
• Timeline: OCC comment period closed May 1, 2026 (211 questions asked); final rules due July 18, 2026 (1 year after enactment); Act takes effect the earlier of January 18, 2027 (18 months post-enactment) or 120 days after final rules. OUSD could launch into the pre-effectiveness window but its 140-partner yield agreements must be designed against a rule that may reshape them.
• Reserve constraints that also apply: eligible reserves limited to cash, short-term Treasuries, repos, SEC 2a-7 money market funds (OUSD's stated composition already fits); PPSIs >$25B must hold 0.5% of reserves (cap $500M) in insured deposits; "timely redemption" ≤2 business days, auto-extended to 7 days if redemptions >10% of supply in 24h.

Sources

• OCC Bulletin 2026-3 (NPRM): https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-3.html
• K&L Gates analysis: https://www.klgates.com/OCC-Proposes-Comprehensive-Rules-to-Implement-the-GENIUS-Act-That-Carry-Substantial-Market-Implications-3-11-2026
• Sullivan & Cromwell memo: https://www.sullcrom.com/insights/memo/2026/March/OCC-Proposes-Regulations-Implement-GENIUS-Act