Main PageThe Clarity Act text permits cryptocurrency companies to provide stablecoin rewards, as long as they don't mimic bank deposit yields. Released on Friday, the document prohibits crypto firms from offering stablecoin yield products that resemble traditional bank deposits, though legitimate transaction-based rewards remain permitted.
CLARITY ACT
A newly unveiled agreement would ban interest payments on stablecoins, addressing a contentious issue in cryptocurrency regulation in line with ongoing discussions throughout the year. For several months, Senators Alsobrooks and Tillis have been working out the details of the legislative text, following the last-minute postponement of a Senate Banking Committee markup on the broader Clarity Act in January. Since then, bank lobbyists and cryptocurrency industry representatives have actively contributed to the ongoing negotiations, at times participating in discussions hosted by the White House.
FOSTERING
In March, the lawmakers announced a preliminary agreement that would prevent crypto companies from offering yield-based returns resembling traditional deposit interest, while still permitting reward programs that don’t directly compete with core banking services.
Cody Carbone, CEO of the Digital Chamber, stated that the public release of the stablecoin yield provisions marks significant progress in addressing one of the remaining hurdles before the Committee can proceed with a markup. He noted that the organization supports the role of rewards in fostering consumer benefits, competition, and innovation within the digital asset space.
FEASIBLE
With this compromise in place, a Senate Banking Committee markup potentially advancing the bill further through the legislative process now appears feasible. However, several other unresolved issues remain under negotiation and have not yet been made public.DIGITAL ASSET MARKET
A newly released agreement would prohibit yields on stablecoins, targeting a controversial aspect of cryptocurrency market regulation in a manner consistent with discussions that have taken place throughout the year.
The latest version of the proposed Digital Asset Market Clarity Act, published Friday, shows a compromise reached by U.S. Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.). Under the proposal, stablecoin issuers would be barred from providing returns simply for holding stablecoin reserves. The text argues that depository institutions deliver essential financial services that support the U.S. economy, and allowing stablecoin providers to offer comparable services could undermine these traditional institutions.
BILL
The latest draft of the proposed Digital Asset Market Structure Act, released Friday, reflects a compromise between U.S. Senators Thom Tillis (RN.C.) and Angela Alsobrooks (DMd.). The bill would prevent stablecoin issuers from offering returns purely for holding stablecoin balances. It emphasizes that depository institutions provide critical financial services underpinning the U.S. economy, and allowing stablecoin providers to replicate such offerings could weaken traditional banking structures.
“Mark it up,” Coinbase CEO Brian Armstrong posted on X, the social media platform. His company played a central role in negotiations and stood to be significantly affected by limits on stablecoin yield programs.
In a separate message, Coinbase’s chief legal officer, Paul Grewal, noted that the current wording “preserves activity based rewards linked to genuine participation in crypto platforms and networks” precisely what banking industry advocates had requested. He added, “Our priority is passing the bill, and we believe this language shouldn’t justify any opposition.”
The formal text states: “No covered party shall, directly or indirectly, pay any form of interest or yieldwhether in cash, tokens, or other consideration to a restricted recipient (A) solely for holding payment stablecoins; or (B) on a payment stablecoin balance in a way that mirrors the economic or functional characteristics of interest-bearing bank deposits.”
However, the restriction does not extend to incentives tied to legitimate activities or transactions that differ from traditional deposit yields maintaining a model comparable to rewards offered by financial institutions for credit card usage. Loyalty programs and similar initiatives, though, would still fall under the rule.
A representative from a cryptocurrency firm noted the change would compel digital asset companies to shift their yield models from passive “buy and hold” approaches to “buy and use” frameworks that align with the bill’s transaction-based criteria.
Exactly how this would function remains unclear, the individual said, citing rulemaking clauses that require the Treasury Department and the Commodity Futures Trading Commission to establish detailed guidelines within one year of the bill’s enactment, clarifying when and how crypto firms may offer yield.
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