Clarity Act text lets crypto firms offer stablecoin rewards while shielding bank yield

Key Points:

• The proposed Digital Asset Market Clarity Act includes a provision banning stablecoin issuers from offering yield solely based on holding stablecoin reserves, aiming to prevent competition with traditional depository institutions.
• The compromise, negotiated by Senators Thom Tillis and Angela Alsobrooks, allows crypto firms to offer rewards tied to bona fide activities or transactions, but prohibits interest-like payments on stablecoin balances.
• Coinbase executives expressed support for the language, emphasizing that it preserves activity-based rewards and aligns with bank lobby demands, while focusing on advancing the bill through the Senate Banking Committee.
• The legislation mandates rulemaking by the Treasury Department and Commodity Futures Trading Commission within a year of enactment to clarify how crypto firms can offer yield, potentially giving regulators flexibility in defining permissible activities.
• Industry groups like the Digital Chamber view the public release of the stablecoin yield language as a positive step toward resolving key issues and promoting innovation and competition in the digital asset space.