Senators try to unlock stalled crypto Clarity Act with compromise on stablecoin yield
Why it matters: Sets the rules for how stablecoins can compete with bank deposits, reshaping investor returns and financial stability.
- Senator Angela Alsobrooks and Senator Thom Tillis are crafting a bipartisan compromise that adds guardrails to stablecoin rewards while keeping the bill alive.
- American Bankers Association is lobbying hard to close what it sees as a stablecoin yield loophole that could trigger a deposit flight from traditional banks.
- GENIUS Act of 2023 barred interest on payment stablecoins, a rule banks say crypto exchanges must also follow to prevent evading congressional intent.
- Crypto platforms may retain a narrow window to offer customer rewards, but only under stricter oversight to satisfy banking concerns.
- Banks fear that unrestricted stablecoin yields could rival savings‑account rates, prompting them to push for tighter controls.
Senators are hammering out a narrow compromise on stablecoin rewards to revive the stalled Digital Asset Market Clarity Act, aiming to protect bank deposits while still letting crypto platforms offer limited incentives. The deal balances the American Bankers Association’s push to seal a yield loophole with the crypto industry’s demand for consumer‑friendly rewards.
