The crypto market structure bill, known as the CLARITY Act, has been a topic of debate for several months due to concerns over stablecoin yield and rewards.
A recent draft of the legislation proposes to prohibit platforms from offering yield on stablecoins, directly or indirectly, in a manner that resembles a bank deposit. This restriction would apply broadly to digital asset service providers, including exchanges and brokers, as well as their affiliates.
The proposal seeks to limit workarounds and prohibit any activity that is economically or functionally equivalent to interest. However, it would allow rewards based on user activity, such as loyalty programs or subscription services, if they are not considered equivalent to interest from an economic or functional standpoint.
Industry leaders are reviewing the proposal in closed-door meetings, with mixed reactions emerging. Some see the text as too restrictive, while others consider it a balanced outcome that preserves transaction-based incentives.