A compromise text on stablecoin yield provisions in the Digital Asset Market Clarity Act was released Friday, and it bars crypto firms from paying interest or yield on stablecoin balances in a manner economically or functionally equivalent to a bank deposit. The draft carves out rewards programs tied to bona fide activities or transactions and directs the Treasury and the CFTC to write implementing rules within a year of enactment. The text extends the prohibition framework beyond last year’s GENIUS Act by applying to all digital asset market participants.
A compromise text on stablecoin yield in the Digital Asset Market Clarity Act was released Friday. The text bars crypto firms from paying interest or yield on stablecoin balances in a manner economically or functionally equivalent to a bank deposit. It carves out rewards programs tied to bona fide activities or bona fide transactions while prohibiting deposit-like yield structures. The draft extends the prohibition framework well beyond last year’s GENIUS Act by applying to all digital asset market participants.
The compromise directs the Treasury and the Commodity Futures Trading Commission to write implementing rules within a year of the bill’s enactment. Under the draft, firms will need to restructure rewards programs from a ‘buy and hold’ model to a ‘buy and use’ model. The release follows a Senate Banking Committee postponement of an earlier CLARITY Act markup in January. The draft therefore sets both substantive limits on stablecoin yields and a one-year timeline for agency rulemaking.
Industry representatives and lawmakers have expressed various views regarding the CLARITY Act’s stablecoin yield compromise. Summer Mersinger praised the leadership of Senators Thom Tillis and Angela Alsobrooks in reaching the agreement, acknowledging their efforts in fostering progress. Dante Disparte from the Blockchain Association noted that the compromise marks meaningful progress in negotiations, stating, “Today’s progress is an encouraging signal that the U.S. is choosing to lead.”
The Crypto Council for Innovation (CCI) expressed disagreement with concerns about deposit flight related to stablecoin adoption, highlighting that the new provisions extend well beyond the scope of the GENIUS Act by encompassing all digital asset market participants. The CCI emphasized the importance of a clear legal framework to ensure the U.S. remains a leader in the crypto space, indicating that every day without such a framework encourages talent and capital to move elsewhere.
The need for the Senate Banking Committee to proceed with markup was underscored among various stakeholders, stressing the urgency of establishing a comprehensive regulatory environment for the digital asset market. The broad consensus among industry stakeholders is one of cautious optimism, with an emphasis on the potential leadership role of the U.S. in digital assets.
The CLARITY Act stablecoin yield compromise affects crypto firms by necessitating a shift from ‘buy and hold’ rewards programs to ‘buy and use’ models. This adjustment aligns with the newly established legal framework, which permits rewards programs only when they are linked to bona fide activities or transactions. This requirement preserves incentives tied to actual participation on crypto platforms, addressing the concerns raised by the banking lobby.
By disallowing interest payments equivalent to bank deposits on stablecoin balances, the compromise aims to regulate how incentives are structured, ensuring they reflect genuine participation rather than passive holding. Firms will need to innovate and develop mechanisms that reward active use and engagement, adhering to the stipulated legal provisions.
The compromise represents a substantive step toward establishing regulatory clarity for stablecoin yields and for how platforms can structure user incentives. Industry groups and lawmakers have urged the Senate Banking Committee to resume markup proceedings so the bill can move through the legislative process. The committee’s resumption of markup was identified by stakeholders as the immediate next procedural priority.
