In the latest version of the U.S. Senate's "Digital Asset Market Clarity Act," the wording regarding stablecoin yields has triggered a strong backlash from the cryptocurrency industry. According to sources familiar with the draft, the new provisions explicitly prohibit users from receiving any form of reward for holding stablecoin balances. The industry widely believes that this approach is overly restrictive and that the provisions are not sufficiently clear.

The Banking Industry Pressure Leads to Limits on Stablecoin Interest

This revision follows a principled agreement reached last Friday by Senators Angela Alsobrooks and Thom Tillis. While prohibiting interest on balances, the new provisions also restrict any practices that might make stablecoin programs substantively equivalent to bank deposits, placing further limits on other potentially permissible activities.

The banking industry has long insisted that stablecoin reward programs must not resemble interest-bearing bank deposits, arguing that competitive products could weaken the banking sector's lending capacity. The final compromise allows for rewards based on user "usage behavior," but prohibits rewards based on held balances.

Closed-Door Review Taking Place on Capitol Hill

The cryptocurrency industry reviewed the revised provisions for the first time in a closed-door session on Capitol Hill in Washington this Monday. This move represents a significant step toward a hearing by the Senate Banking Committee. If the draft passes the committee review, the legislative body will be able to prepare a consolidated version to be submitted for a vote by the full Senate.

Multiple Controversies Remain Unresolved

Although the issue of stablecoin yields was a major sticking point hindering the bill's progress, it is not the only obstacle. The industry is still awaiting the final proposal for a Decentralized Finance (DeFi) regulatory framework—with Democrats demanding assurances of effective anti-money laundering (AML) protections. Additionally, Democrats are insisting on a ban preventing high-level government officials from deriving personal profit from the crypto industry, a clause clearly directed at President Trump.

It is worth noting that the U.S. passed the "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Stablecoins Act) last year, marking the first major legislation specifically targeting a sector of the cryptocurrency space. However, the industry views this as the first step in a two-step strategy. The "Clarity Act" is seen as the key to fully integrating crypto assets into the U.S. financial system, with expectations that it will eliminate regulatory uncertainty and attract more institutional investors and developers to the market.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.