U.S. Senate Clarity Act compromise limits stablecoin yield offerings

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Senate stablecoin yield limits

Highlights

The U.S. Senate Clarity Act compromise prohibits stablecoin issuers from offering yield or interest to restricted recipients solely for holding payment stablecoins.
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.
Senators Thom Tillis and Angela Alsobrooks finalized these provisions after months of negotiation, maintaining alignment with prior frameworks to protect traditional bank services from stablecoin competition.

Senate compromise sets stablecoin reward boundaries

As reported by CoinDesk, the newly released agreement between U.S. Senators Thom Tillis and Angela Alsobrooks prohibits covered parties from paying interest or yield to restricted recipients solely for holding payment stablecoins or in ways that are economically equivalent to interest-bearing bank deposits.

The draft says stablecoin issuers cannot offer yield based only on reserves backing the tokens. It argues that depository institutions provide services integral to the strength of the American economy and says similar offerings from stablecoin issuers may inhibit those institutions.

The restriction includes payments made directly or indirectly in cash, tokens or other consideration. At the same time, the text creates an exception for incentives based on bona fide activities or bona fide transactions, drawing a line between permitted rewards and returns that resemble deposit yield.

Implications for banks and the crypto sector

The approach keeps intact a framework that lawmakers and industry participants have discussed since the start of the year. It also reflects the direction outlined in a March agreement, which blocked crypto firms from offering bank-like yield while leaving room for rewards programs that do not rival core banking products.

The language says the restriction also applies to loyalty programs or similar efforts, underscoring the effort to shield bank funding products from competition dressed up as stablecoin incentives. Senators Alsobrooks and Tillis have negotiated the provision for months after a Senate Banking Committee markup on the broader Clarity Act was postponed at the last minute in January.

In a statement, Digital Chamber CEO Cody Carbone says the trade association welcomes the public release of the stablecoin yield language as an important step toward resolving one of the final issues standing between the committee and a markup. He also calls for the committee to move ahead, while saying the group will continue to advocate for rewards that support consumer utility, competition and innovation in digital assets.

Our earlier article on SoFi Technologies’ Q1 results highlighted a sharp jump in net income, rising membership, and the rollout of its Big Business Banking product that integrates blockchain functionality and a proprietary stablecoin. We also noted that despite stronger fundamentals, SOFI remained technically weak and range-bound below key resistance, with analysts watching for a decisive breakout to confirm a shift in momentum.

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