New Legislation Allows Crypto Firms to Offer Stablecoin Rewards While Protecting Bank Yields

A newly introduced agreement aims to regulate the contentious aspect of stablecoin yield in the crypto market, adopting an approach similar to previous discussions. The proposed Digital Asset Market Clarity Act, released on Friday, reveals that a compromise between U.S. Senators Thom Tillis and Angela Alsobrooks would ban stablecoin issuers from offering yield based solely on holding stablecoin reserves, as this may hinder the financial services provided by depository institutions. The new text allows for rewards tied to real participation on crypto platforms and networks, similar to those offered by financial firms for credit card activity. However, this restriction does not apply to incentives based on genuine activities or transactions that differ from interest-bearing bank deposits. The legislation requires digital asset firms to restructure their yield offerings, shifting from a 'buy and hold' system to a 'buy and use' model, and directs the Treasury Department and Commodity Futures Trading Commission to establish clear guidelines for crypto firms to offer yield within a year of the bill becoming law.