Cryptocurrency companies can continue to pay interest-like rewards to customers, federal regulators said Wednesday, despite warnings from banks that such programs could drain trillions of dollars in deposits from the banking system.

The new rules are part of the implementation of the GENIUS Act, which was signed into law last year and was meant to codify the rules and regulations around issuers of stablecoins.

Under the rules published by the Office of the Comptroller of the Currency, stablecoin issuers like Circle will continue to be prohibited from paying interest to people holding their coins. But the exchanges that trade and hold those stablecoins, like Coinbase, Robinhood, and others, can pass along any earnings from those coins to customers in interest-like rewards.

Stablecoins are a type of cryptocurrency designed to maintain a steady value, typically $1 per coin. Stablecoins are backed by bank deposits and U.S. Treasuries, which earn interest.

The interest earned from the securities backing stablecoins is at the center of the fight between banks and crypto companies. The cryptocurrency industry wants to offer customers a return on holding stablecoins by converting the interest that stablecoin issuers earn from bonds and dollars backing those coins into a yield for customers.

Under the new OCC rules, exchanges will be able to do so on a “case-by-case basis,” regulators said. The practice was not prohibited, as banks had wanted.

Banking groups have pushed for tighter restrictions on stablecoin rewards largely because cryptocurrency companies can and often do offer higher yields on savings than traditional bank accounts.

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