US Senate Reaches Agreement on CLARITY Act Stablecoin Regulation

The US Senate has made significant progress on the CLARITY Act, which aims to regulate stablecoins in the country. A key provision of the bill addresses a loophole left by the GENIUS Act, which banned stablecoin issuers from paying interest directly but did not fully address how exchanges or affiliated platforms might offer rewards that effectively act like yield in the secondary market.

Under the new language, any rewards offered by covered entities will be restricted if they function like a deposit interest. However, the bill still allows genuine platform-based rewards, such as incentives for usage or activity, as long as they do not cross the line into interest-like returns.

The agreement on the CLARITY Act's stablecoin yield proposal removes one of the biggest obstacles to its progress. Industry experts see this development as a pivotal step towards resolving regulatory issues and positioning the US as a global leader in crypto regulation. A committee markup is expected to take place in May, where the bill will be reviewed and amended.