US Crypto Industry Supports CLARITY Act Compromise, Urges Senate Banking Committee to Advance Legislation

Following the release of a compromise text by US Senators Thom Tillis and Angela Alsobrooks on stablecoin yield in the Digital Asset Market Clarity Act, crypto trade groups swiftly called for a markup of the key market structure legislation. The proposed text prohibits crypto firms from offering interest or yield on stablecoin balances in a manner similar to traditional bank deposits, while exempting rewards programs linked to genuine activities or transactions. The agreement directs the Treasury and the CFTC to establish rules within a year of enactment. Industry leaders, including the Blockchain Association and the Crypto Council for Innovation, have expressed support for the compromise, albeit with some reservations. The Crypto Council for Innovation has voiced concerns that the new language extends the prohibition framework too far, applying to all digital asset market participants. Nevertheless, the council has urged the Senate Banking Committee to advance the bill, emphasizing the need for a clear legal framework to ensure the US remains a leader in the crypto industry. Circle's Chief Strategy Officer Dante Disparte and Coinbase's CEO Brian Armstrong have also endorsed the deal, highlighting its potential to drive progress in the CLARITY Act negotiations and promote US leadership in digital assets. The compromise necessitates firms to restructure their rewards programs from a 'buy and hold' model to a 'buy and use' one, which is expected to have significant implications for the industry.