Crypto Firms Can Offer Stablecoin Rewards Under New Clarity Act Text, But With Restrictions

A recent development in the crypto market structure legislation has led to the release of a new section of the proposed Digital Asset Market Clarity Act text. This text reveals that a compromise has been reached between U.S. Senators, which would ban stablecoin issuers from offering yield based solely on holding stablecoin reserves. The new text aims to preserve the strength of the American economy by preventing stablecoin issuers from providing financial services that may inhibit depository institutions. As a result, crypto firms will need to restructure their yield offerings to focus on 'buy and use' systems rather than 'buy and hold' systems. The text also includes provisions for rulemaking, which will be led by the Treasury Department and Commodity Futures Trading Commission. This rulemaking will provide clearer guidelines on how crypto firms can offer yield products, taking into account factors such as balance, duration, and tenure. Additionally, the text includes anti-evasion language to prevent crypto firms from circumventing the new regulations. The release of this text is seen as a significant step forward in the legislative process, with many industry leaders welcoming the development. Coinbase executives have expressed satisfaction with the language, stating that it preserves activity-based rewards tied to real participation on crypto platforms and networks. The Digital Chamber CEO has also expressed encouragement, stating that the release of the stablecoin yield language is an important step toward resolving one of the final issues standing between the Committee and a markup.