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

A newly proposed agreement has been reached regarding stablecoin yield, a contentious aspect of the crypto market structure legislation. The new text, part of the proposed Digital Asset Market Clarity Act, reveals that crypto firms will be prohibited from offering yield solely based on holding stablecoin reserves. However, 'bona fide' transactions and activities will be allowed to generate rewards, similar to those offered by financial institutions for credit card activity. The compromise, hashed out by U.S. Senators Thom Tillis and Angela Alsobrooks, aims to strike a balance between the interests of crypto firms and traditional banking institutions. The text also includes provisions for rulemaking, which will be directed by the Treasury Department and Commodity Futures Trading Commission, to clarify how crypto firms can offer yield products. This development is seen as a crucial step forward in the progress of the legislation, with many industry players, including Coinbase and the Digital Chamber, welcoming the release of the stablecoin yield language as a positive move towards resolving outstanding issues and driving innovation in the digital asset ecosystem.