New Legislation Allows Crypto Firms to Offer Stablecoin Rewards with Certain Restrictions

A newly proposed agreement has been released, which aims to regulate the crypto market by prohibiting stablecoin issuers from offering yields based solely on holding stablecoin reserves. This move is seen as a compromise between U.S. Senators and crypto firms, and is expected to pave the way for a Senate Banking Committee hearing. The new text allows for rewards tied to real participation on crypto platforms and networks, but restricts incentives that are economically or functionally equivalent to interest-bearing bank deposits. Crypto firms may need to restructure their yield offerings to comply with the new regulations, which are set to be clarified through a rulemaking process within a year of the bill becoming law.