New Stablecoin Rules Threaten Coinbase-Circle Deal

New stablecoin rules formalize existing law, limiting issuers and requiring contract rewrites.

  • VanEck‘s Matthew Sigel states proposed regulatory guidance merely formalizes rules already in the GENIUS Act.
  • The OCC’s new rules could limit stablecoin issuers to a single branded token and restrict reward programs.
  • Coinbase’s revenue-sharing deal with Circle for USDC was already expected to be redrawn this year.
  • Coinbase stock saw pre-market gains after a recent drop following its tokenized stocks announcement.

Analyst Matthew Sigel, head of digital assets research at VanEck, clarified in a recent post that panic over new stablecoin rules is overblown. “The OCC guidance just codifies what’s already in GENIUS,” he wrote, referring to regulatory provisions already embedded in law.
Consequently, Coinbase was already anticipated to adjust its agreement with Circle when it renews later this year. Their 2023 deal gives Coinbase 100% of on-platform interest from USDC and shares 50% of off-platform revenue.
However, the OCC is now pushing back on potential loopholes for stablecoin rewards. New proposed rules would effectively limit each permitted payment stablecoin issuer to a single branded token.
This change could impact arrangements like Paxos issuing Paypal‘s PYUSD, which currently offers rewards. PayPal’s stock moved slightly in pre-market trading after recent volatility.
Meanwhile, Coinbase stock edged 0.7% higher pre-market on Friday after a previous session dip. The GENIUS Act will take effect 18 months after passage or 120 days after final rules, whichever is first.

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