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

A newly released provision in the Digital Asset Market Clarity Act aims to regulate stablecoin yield offerings, effectively banning issuers from providing rewards solely for holding stablecoins. This move seeks to safeguard the traditional banking sector, emphasizing that depository institutions are crucial to the US economy and that similar services offered by stablecoin issuers could hinder their operations. The proposed legislation, a result of negotiations between US Senators Thom Tillis and Angela Alsobrooks, is expected to advance to a Senate Banking Committee hearing. Crypto firms, including Coinbase, are likely to restructure their reward systems to comply with the new rules, focusing on activity-based incentives rather than passive holding. The text also includes provisions for regulators to define the specifics of yield products and anti-evasion measures. Industry leaders have welcomed the development, seeing it as a step towards resolving key issues and driving innovation in the digital asset ecosystem.