New Legislation Allows Crypto Firms to Offer Stablecoin Rewards with Certain Conditions

A newly released agreement has clarified the rules surrounding stablecoin yield, prohibiting issuers from offering yield based solely on holding stablecoin reserves. However, the legislation allows for rewards tied to real participation on crypto platforms and networks, which is seen as a positive development for the industry. The new text, released by U.S. Senators Thom Tillis and Angela Alsobrooks, aims to strike a balance between regulating stablecoin yield and allowing for innovation in the digital asset market. The legislation includes provisions that direct the Treasury Department and Commodity Futures Trading Commission to launch a rulemaking process within a year of the bill becoming law, which will provide further guidance on how crypto firms can offer yield products. The rulemaking provision gives regulators latitude in defining what crypto companies can do with yield products, and allows for consideration of factors such as balance, duration, and tenure in rewards calculation. The text also includes anti-evasion language to prevent crypto firms from circumventing the rules. The development is seen as a step forward in the progress of the Digital Asset Market Clarity Act, and is welcomed by industry stakeholders, including the Digital Chamber and Coinbase.