U.S. Senate CLARITY Act Latest Draft: Prohibits Earning Yields Solely from Holding Stablecoins

Gate News reports that on March 24, cryptocurrency industry professionals saw the latest provisions regarding stablecoin rewards in the revised Senate “Digital Asset Market Clarity Act” (CLARITY Act) during a closed-door hearing at Capitol Hill in Washington. According to a person familiar with the current draft, the new clause, announced last Friday by Senators Angela Alsobrooks and Thom Tillis, will prohibit earning rewards solely by holding stablecoins, restrict practices that equate such plans with bank deposits, and impose further restrictions on other potentially permissible activities. The specific mechanism for recognizing activity-based stablecoin rewards remains unclear. This compromise stems from lobbying battles between the crypto industry and the banking sector: banks insist that stablecoin rewards should not resemble interest-bearing bank deposits, arguing that such competing products could harm banking and suppress lending. The final compromise allows reward programs based on user activity with stablecoins but prohibits rewards based on account balances. This closed-door hearing aims to facilitate the Senate Banking Committee’s scheduling of a hearing, a crucial step toward full Senate voting on the bill. A similar version of the CLARITY Act was passed by the House last year, and another version cleared the markup process in the Senate Agriculture Committee. The bill still faces other hurdles: parties need to reach consensus on a DeFi regulatory framework, and Democrats insist on including provisions that prohibit senior government officials from profiting personally from the crypto industry.