U.S. Senate Clarity Act Limits Stablecoin Yield Offerings

The U.S. Senate has made progress in its efforts to regulate the crypto market structure through the Clarity Act. The agreement reached by Senators Thom Tillis and Angela Alsobrooks prohibits stablecoin issuers from offering yield or interest solely for holding payment stablecoins, in an effort to prevent digital tokens from competing directly with bank deposits.

The compromise maintains alignment with prior frameworks that protect traditional bank services from stablecoin competition. The draft carves out exceptions for incentives tied to bona fide activities or transactions, but blocks stablecoin rewards that mimic deposit yields and bank-like products.