Cryptocurrency Industry Supports Compromise on CLARITY Act, Urges Senate Banking Committee to Move Forward

Following the release of a compromise text by U.S. 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. However, it does allow for rewards programs tied to genuine activities or transactions, and tasks the Treasury and CFTC with developing rules within a year of enactment. The Blockchain Association's CEO, Summer Mersinger, welcomed the deal as a step in the right direction, emphasizing the need for a clear legal framework to prevent top talent and innovative companies from relocating elsewhere. The Crypto Council for Innovation also endorsed the bill, while expressing concerns that the new language extends the prohibition framework too far. Its CEO, Ji Hun Kim, urged the committee to advance the bill, stating that the goal is to ensure the U.S. leads in the crypto space. Circle's Chief Strategy Officer, Dante Disparte, endorsed the deal without reservation, highlighting the progress made in the CLARITY Act negotiations. Coinbase, which had a significant stake in the negotiations, also expressed support for the language, which preserves activity-based rewards tied to real participation on crypto platforms. The Senate Banking Committee had previously postponed a markup of the CLARITY Act in January, but the yield language has been the major obstacle. To comply with the new regulations, firms will need to restructure their rewards programs from a 'buy and hold' model to a 'buy and use' one.