As US senators gear up for the markup of a significant cryptocurrency market structure bill this week, industry stakeholders are voicing their opinions regarding proposed adjustments that might determine if stablecoin holders are eligible to earn interest and rewards.
An updated version of the Digital Asset Market Clarity Act, released on Monday, expresses that “a digital asset service provider may not pay any form of interest or yield […] solely in connection with the holding of a payment stablecoin,” essentially prohibiting passive yields on stablecoin holdings.
Nevertheless, the draft of the bill allows for structured reward systems, indicating that stablecoin incentives will be accepted under specific conditions, such as “providing liquidity or collateral” or “governance, validation, staking, or other ecosystem participation.”
Source: US Senate Banking Committee
The draft indicates that lawmakers might be open to criticism suggesting clearer definitions regarding interests and rewards associated with stablecoins. However, certain banking sectors have campaigned against such benefits previously outlined in the GENIUS Act, legislated in July.
Says Nic Puckrin, Co-founder of Coin Bureau, that the Senate seeks to reconcile the industry’s demands for yield flexibility while addressing banks’ pushback against competition from deposit-like arrangements. He comments:
“Whichever way the chips fall, though, it’s clear stablecoins will remain a competitor to bank deposits. Short of an outright ban on any form of rewards, there’s little that can stop this, and this is a new reality banks will have to reckon with.”
The Banking Committee is anticipated to review the bill on Thursday, with the potential of forwarding it for a larger Senate vote. Conversely, the Senate Agriculture Committee has stated that it won’t be addressing its own version of the bill until late January.
Eli Cohen, Chief Legal Officer at Centrifuge, remarked that if the bill falters in any committee, the chance of establishing a market structure for this session may effectively disappear. Moreover, he noted the potential impact of party alignments on voting patterns.
Amid controversies surrounding midterm elections and decentralized finance (DeFi), a couple of Senate Democrats have allegedly called for the CLARITY Act to integrate measures that would preclude public officials, including the President, from benefitting financially from investments in digital asset firms. Additionally, speculations continue that the bill’s passage may be delayed until after 2027, particularly as midterms might influence Congressional control.
US SEC Chair Paul Atkins has forecasted that the bill might receive formal approval from the White House by the end of 2026.
