Overview
- The GENIUS Act, passed in July 2025, bars stablecoin issuers from paying direct interest and requires full 1:1 backing and stronger anti-money-laundering checks.
- Circle CEO Jeremy Allaire has said transaction-based incentives and loyalty programs are the lawful path forward for USDC and framed the interest ban as a business opportunity.
- U.S. regulators including the FDIC, FinCEN, OFAC, the OCC, and Treasury have issued early 2026 proposals to implement the law but leave unclear the line between permitted rewards and prohibited interest.
- USDC circulation stayed large at roughly $77 billion by the end of Q1 2026 and issuers continue to earn returns on reserve assets, meaning firms keep the reserve spread even if they cannot pay holders interest.
- Global alternatives and platform moves, such as Ledger’s support for ADI Chain, are expanding non-U.S. settlement rails and could shape how firms design reward programs and cross-border flows.