Clarity Act Divides Crypto Industry Over Stablecoin Yield Ban

A contentious debate is unfolding in the crypto industry over the Clarity Act, a proposed law that aims to regulate stablecoins. At the heart of the disagreement is the ban on stablecoin yield tied to deposit-like returns, which has sparked a split between Coinbase and Frax Finance.

Coinbase has rejected the latest draft of the Clarity Act for the second time, citing major concerns over the language that would restrict stablecoin yields. The company's stance has been echoed by Crypto Banter founder Ran Neuner, who argued that banks pushed for the restriction after years of failing to innovate.

On the other hand, Frax Finance founder Sam Kazemian supports passing the broader bill first and revisiting the yield issue later. Kazemian believes that securing a law passed by Congress is more durable than relying on SEC or CFTC guidance, which can change with a new administration.