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

A newly introduced section of the proposed Digital Asset Market Clarity Act, released on Friday, outlines a compromise that would bar stablecoin issuers from providing yield solely based on holding stablecoin reserves. This approach aims to preserve the strength of the American economy by preventing stablecoin issuers from offering services that may hinder 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, it restricts incentives that are economically or functionally equivalent to interest-bearing bank deposits. The legislation is likely to move forward, with a Senate Banking Committee hearing potentially advancing it further. Crypto firms may need to restructure their yield offerings to comply with the new rules, which will be clarified through a rulemaking process directed by the Treasury Department and Commodity Futures Trading Commission within a year of the bill becoming law.