The latest version of the Senate's CLARITY Act includes a ban on yield-bearing stablecoin balan

Stablecoin Yield Ban Stirs Industry Concerns

For the first time, the latest revision of the US Senate's digital asset market structure bill, the Clarity Act, has been made public to the crypto industry. However, the section concerning stablecoin yields has sparked significant worry.

This new version, pushed forward by Senators Angela Alsobrooks and Thom Tillis, would ban users from earning any yield simply for holding stablecoins. It also restricts any plan that resembles interest on a bank deposit. Instead, it only allows reward programs based on a user's activity with stablecoins, not on their balance.

The banking sector has long insisted that stablecoin rewards shouldn't be like interest-bearing deposits. Their reasoning? Such competing products, they argue, could weaken traditional banks and hurt their lending business.

On the other side, insiders from the crypto industry feel this provision is overly narrow and poorly worded. A version of the bill has already cleared the House, and the Senate Agriculture Committee has also given its approval. That said, to move toward a final combined version, it must still go through a hearing in the Senate Banking Committee.

Beyond this, disagreements remain on other parts of the bill. These include how to regulate decentralized finance, as well as a provision that would prohibit senior government officials from profiting from the crypto industry.