Stablecoin yield in crypto Clarity Act won't allow rewards on balances, latest text says

Key Points:

• The revised Digital Asset Market Clarity Act in the Senate proposes banning yield payments for merely holding stablecoins and restricts any program resembling bank deposits, though the specifics on allowable stablecoin rewards remain unclear.
• This revision emerged from a compromise between the crypto industry and bankers, allowing rewards based on stablecoin activities but not on balances, addressing bankers' concerns about competition with interest-bearing deposits.
• The legislation, which passed earlier versions in the House and Senate Agriculture Committee, now faces the Senate Banking Committee, a critical step toward finalizing a combined bill for a Senate vote.
• Additional challenges include finalizing oversight of decentralized finance (DeFi) to address illicit finance concerns and implementing a ban on senior government officials profiting from crypto, targeting former President Donald Trump.
• Industry insiders view the Clarity Act as the essential second step following the GENIUS Act, anticipating that its passage will reduce regulatory uncertainty and attract greater institutional investment and development in the U.S. crypto sector.