The new text of the U.S. "CLARITY Act" allows crypto companies to offer stablecoin rewards while safeguarding bank deposit interest services

Deep Tide TechFlow News, May 2nd, according to CoinDesk reports, the newly announced provisions of the “Digital Asset Market Clarity Act” show that a compromise plan led by Senator Thom Tillis (Republican from North Carolina) and Angela Alsobrooks (Democrat from Maryland) will prohibit stablecoin issuers from providing yields solely based on holding stablecoin reserves. The text states, “Financial services provided by deposit institutions are vital to the strength of the U.S. economy,” and stablecoin issuers offering similar services “may hinder” these institutions.

The text stipulates that no regulated party shall directly or indirectly pay any form of interest or yield (whether in cash, tokens, or other consideration) to restricted recipients in the following cases: solely related to holding the payment stablecoins of the restricted recipient; or in a manner economically or functionally equivalent to paying interest or yields on bank deposits, for the stablecoin balances.

This restriction does not apply to incentives “based on genuine activities or real transactions,” similar to rewards offered by financial institutions for credit card activities, but applies to loyalty programs or similar initiatives. The text also includes anti-avoidance clauses and requires the U.S. Department of the Treasury and the Commodity Futures Trading Commission (CFTC) to initiate rulemaking procedures within one year after the bill becomes law, clarifying the specific ways and conditions under which crypto companies can offer yields.

Cody Carbone, CEO of the Digital Chamber, stated that the association “welcomes the public release of the stablecoin yield provisions, which is an important step in resolving the final key issues between the committee and the review.”