CLARITY Act Draft Prohibits Stablecoin Yield, Favoring Banking Industry

The Digital Asset Market Clarity Act has been revised to ban the offering of yield directly or indirectly on stablecoin balances, echoing bank demands. This provision is set to impact crypto firms, particularly those that offer stablecoins with rewards. Circle's share price plummeted by 20% following the announcement, wiping $5.6 billion in market value.

The banking industry has been fighting against crypto firms over yield provisions since January, with sustained lobbying efforts contributing to the current draft. The language is broad and covers exchanges, brokers, and affiliated entities, effectively closing structural workarounds that had kept stablecoin rewards open for platforms like Coinbase.