Interest rules retreat, stablecoin regulations - US authorities

[Washington Current Affairs] On the 21st, the U.S. Office of the Comptroller of the Currency (OCC) released final rules regarding the law that establishes regulatory rules for "stablecoins," crypto assets (virtual currencies) whose values ​​are designed to be linked to legal currencies such as the dollar. The rule that prohibits interest payments from stablecoin issuers to holders via third parties such as exchange companies is actually a step backwards compared to the original proposal. The financial industry, which is concerned about deposit outflows, is likely to push back against the move.

The name of the law is the "Genius Law." The law, which is an initiative of the Trump administration and aims to promote the growth of the crypto asset industry, is scheduled to go into effect on January 18 next year.

The law prohibits issuers from paying interest or fees directly to users, but does not restrict them from being granted through third parties such as exchanges.

Amid the existence of exchange companies offering high yields, the financial industry, which fears a huge outflow of deposits, is calling on the authorities to prevent loopholes in the law. The OCC proposed rules in February of this year that included assumptions about the types of transactions that would constitute a violation of the rules.

However, many concerned parties objected to the ban on interest, saying that the interpretation should be narrower. Officials said, ``If any serious (regulatory) evasion is confirmed, we will (legally) pursue it.''