New Clarity Act Text Permits Crypto Firms to Offer Stablecoin Rewards Under Certain Conditions

A newly released section of the proposed Digital Asset Market Clarity Act reveals that crypto firms will be prohibited from offering yield based solely on holding stablecoin reserves. However, the text allows for 'bona fide' transactions and activities to be rewarded, similar to incentives offered by financial institutions for credit card usage. The legislation aims to strike a balance between regulating stablecoin issuers and preserving the competitiveness of traditional banks. The new text is the result of a compromise between U.S. Senators Thom Tillis and Angela Alsobrooks, and is seen as a crucial step towards advancing the legislation. Crypto companies, such as Coinbase, have expressed satisfaction with the language, which they believe will allow them to continue offering rewards to customers while complying with regulatory requirements. The text also includes provisions for rulemaking, which will be overseen by the Treasury Department and the Commodity Futures Trading Commission, to provide further clarity on the regulation of stablecoin yield products.