US Senate CLARITY Act Draft Limits Stablecoin Earnings

The US Senate's CLARITY Act has been a long-running and contentious piece of legislation aimed at regulating digital assets. The latest draft of the bill, unveiled in a closed-door session on Capitol Hill, contains a compromise that addresses one of the key sticking points: stablecoin rewards.

According to industry sources, the revised draft bans passive yield on stablecoin balances, while permitting rewards tied to user activity such as trading or payments. This distinction may seem clear-cut, but early reactions suggest it could be tricky to execute in practice.

The bill's proponents argue that this compromise strikes a balance between the needs of cryptocurrency firms and traditional banks. However, the lack of clarity on how these activity-based rewards should work has raised concerns among industry players.