What exactly does the GENIUS Act prohibit?
Section 4(a)(11) of the GENIUS Act stops a permitted payment stablecoin issuer, and a foreign payment stablecoin issuer, from paying the holder of a payment stablecoin any form of interest or yield, in cash, in tokens or in any other consideration, solely in connection with holding, using or retaining the coin (Davis Polk, Bank Policy Institute).
The qualifier at the end carries more weight than the ban at the front. Solely in connection with holding is the operative phrase, so a payment made because the coin is sitting still is caught, while a payment made because a user did something is a separate question. Most of the argument since the Act passed has been about where that line falls.
The prohibition is also written against the issuer and nobody else. Congress did not extend it to affiliates or to platforms, which is why reward programmes on stablecoin balances carried on after the Act was signed.
Can an exchange or an affiliate pay the yield instead?
That is the question the American rulemaking is answering, and the proposed answer is no. The Office of the Comptroller of the Currency issued its GENIUS Act framework at the end of February 2026, published it in the Federal Register on 2 March, and closed the comment period on 1 May 2026 (Davis Polk, Morrison Foerster).
The mechanism is a rebuttable presumption. Where an issuer has an arrangement with an affiliate or a related third party, and that party pays holders interest or yield connected to holding the coin, the arrangement is presumed prohibited. The issuer may rebut it in writing by showing the OCC that the arrangement is neither prohibited nor an attempt to evade the prohibition. The term related third party is drawn to catch yield-as-a-service providers and white-label issuers by name, and the proposal takes the Bank Holding Company Act's broad definition of affiliate rather than a narrower one.
Two things are carved out. A merchant may offer its own discount for paying in stablecoins, and an issuer may share profits with a non-affiliate partner in a white-label arrangement. Both survive because neither pays the holder for holding.
Do MiCA and Singapore ban it too?
Yes, and the European ban is the wider of the two. MiCA has a pair of articles under the same heading, Prohibition of granting interest: Article 40 for asset-referenced tokens and Article 50 for e-money tokens, the two categories most stablecoins fall into. Article 50 binds issuers and then binds crypto-asset service providers separately, so an exchange or a custodian is covered directly rather than through an anti-evasion presumption (Regulation (EU) 2023/1114, Tokeny).
MiCA also defines what it is banning more broadly than the American text does. Interest covers any remuneration or benefit related to the length of time a holder holds the token. Naming a payout a bonus or a loyalty discount does not move it outside the article if the amount depends on holding time.
Singapore joined on 1 September 2026, when the Monetary Authority of Singapore opened a consultation on amendments to the Payment Services Act 2019 that would prohibit interest on MAS-regulated stablecoins, alongside full reserve backing and recovery and wind-down planning. Comments close on 16 October 2026 (CoinDesk, PYMNTS).
If the holder does not get the reserve yield, who does?
The issuer, unless it has agreed to give some of it away. The reserve is real money and it earns whatever it is invested in, and no rule directs that earning anywhere in particular. So the yield stays upstream of the holder, where it becomes a term in a commercial agreement rather than a rate on a balance.
That is why distribution agreements matter more than they look. The economics of a regulated stablecoin are settled between the issuer and whoever brings the balances, which is the exchange, the wallet or the platform that owns the customer. If you are building on somebody else's coin, that negotiation is the one you are in, and it is better understood before you pick a partner than after.
What does this change for an agent that spends stablecoins?
For the payment itself, very little. An agent settling in a regulated stablecoin is using it the way the law intends, as a means of payment, and the interest ban does not touch a transaction (why AI agents settle in stablecoins).
Where it lands is the float. Any design that parks a balance in a wallet between purchases is holding an asset that, by rule, pays nothing, so the money has a carrying cost for as long as it sits there. Leaving a balance idle is a choice with a price on it. Fund the agent close to the spend, or accept the cost and say so in the model, but do not build a treasury assumption on a yield the regulation has removed.