Stablecoin Rewards Dispute Stalls CLARITY Act Progress

The CLARITY Act, aimed at establishing clearer rules for the digital asset market, has hit a roadblock due to disagreements between lawmakers and banks over stablecoin rewards.

Lawmakers had proposed allowing stablecoin issuers to offer incentives to users as high as 3-4%, but banks opposed this idea. They argued that such incentives could encourage customers to move their money from bank deposits into crypto wallets, affecting liquidity in the banking system.

The White House attempted to broker a compromise by proposing restrictions on how rewards could be distributed. However, banks rejected the plan and pushed for stricter limits.