Phantom and Consensys Push Back Against OCC Stablecoin Ban

Phantom Wallet and Consensys filed comments with the Office of the Comptroller of the Currency opposing a proposal to bar stablecoin yield earned through third-party decentralized finance applications.

Phantom’s assistant general counsel Marisa Tashman Coppel argued in Phantom’s filing that the GENIUS Act was designed to prevent stablecoin issuers from acting like uninsured deposit takers and that the law prohibits issuers from offering interest. Extending the prohibition to independent third parties, the filing states, “goes beyond what the statute says.” The submission added that the OCC’s anti-evasion authority “doesn’t give it a blank check to rope in unrelated parties acting on their own commercial judgment.”

Consensys, the company behind the MetaMask wallet, backed Phantom and asked the OCC to confirm in the final rule that non-custodial software interfaces are not regulated intermediaries. Consensys urged the agency to distinguish between “user incentives” and “yield” and noted that Congress twice rejected amendments that would have extended the ban to non-issuers.

The OCC’s proposal would use anti-evasion authority to prevent stablecoins from being used to earn interest through third-party platforms. DeFi firms and wallet providers argue that when users deposit tokens such as USDC into platforms like Aave, any returns come from the platform and involve investment risk, not from the token issuer.

The GENIUS Act became law in July and regulators, including the OCC, have opened rulemaking to meet a statutory implementation deadline next July. Banking groups have urged a broader prohibition. In its filing the American Bankers Association wrote that the OCC should “issue a broad prohibition because Congress required one, and because the evidence shows that anything less will not work.”

The question of third-party yield influenced earlier negotiations on crypto market structure and was a factor in debates over the CLARITY Act. Industry participants had accepted a prior compromise that would preserve the ability to earn interest via third parties; the OCC proposal has reopened that disagreement during the GENIUS Act rulemaking.

The regulatory process will determine whether non-issuers can continue to facilitate third-party yield arrangements under existing statutory carve-outs or whether regulators will restrict those arrangements for stablecoins.