CLARITY Act Draft Restricts Stablecoin Yield Rewards Now
- New CLARITY Act text would bar stablecoin yields that resemble deposit interest.
- The draft still permits activity-based rewards if they avoid interest-like design.
- Industry reviewers say the bill narrows how exchanges can reward stablecoin use.
Crypto industry leaders are reviewing new legislative language in the Digital Asset Market Clarity Act, or CLARITY Act, that would restrict stablecoin yields and rewards. The latest text would bar platforms from offering returns on stablecoin holdings in ways that resemble bank deposits. The proposal has drawn mixed reactions, with some industry figures calling it restrictive while others describe it as a workable compromise.
Crypto journalist Eleanor Terrett disclosed the details in a post on X after reviewing an internal stakeholder email. According to the text she shared, the proposal would prohibit platforms from offering yield “directly or indirectly” for holding a stablecoin. It would also ban returns offered in a way that mirrors deposit interest.
The restriction would apply broadly to digital asset service providers, including exchanges, brokers, and their affiliates. The language aims to stop workarounds by blocking anything considered “economically or functionally equivalent” to interest.
Draft Text Draws Immediate Industry Review
Crypto industry representatives reviewed the latest legislative text on March 23. Their review focused on a compromise framework for stablecoin yields and rewards. At the same time, crypto trade groups met with members of the US Senate Banking Committee.
Bank representatives were also expected to review the bill text and meet with lawmakers. That broader review reflects the sensitivity around how stablecoins may operate under federal rules. It also shows how closely both the crypto and banking sectors are watching the proposal.
Terrett said the draft would also allow activity-based rewards tied to user actions. Those rewards could include loyalty, promotional, or subscription programs. Still, the text says those programs must not amount to interest.
Rewards Could Stay, but Limits Would Tighten
The draft would direct the SEC, CFTC, and US Treasury to jointly define which rewards are allowed. Those agencies would also create anti-evasion rules within one year. That process would shape how far platforms can go when structuring incentives.
One industry leader who reviewed the draft said it marked a departure from earlier discussions with the White House. That person warned the “economic equivalence” standard is vague. They also said future regulators could apply it more aggressively.
The same source pointed to limits on rewards linked to balances or transaction amounts. Those limits could make incentives harder to design. If rewards cannot connect to balances or activity size, how will platforms keep user programs attractive?
Related: Crypto Equities Gain as Trump Renews CLARITY Act Push Now
Mixed Views Emerge Across the Industry
Some crypto leaders described the overall approach as restrictive. They said the language could hurt revenue models that depend on yield products to attract and retain users. That concern appears strongest among firms that offer passive returns.
Non-yield-bearing stablecoins such as USDC and USDT are expected to face little direct impact. By contrast, leading DeFi protocols and crypto exchanges that offer passive income products could see more pressure. The difference reflects how the draft targets returns rather than simple stablecoin use.
Another representative called the language “a more narrow and restrictive approach toward crypto.” Even so, not every reviewer viewed the text negatively. Some said it preserves transaction-based incentives while drawing a clear line against interest-bearing stablecoin accounts.
Terrett also reported that some insiders saw the proposal as the best possible result under the circumstances. They said the text was broader than the earlier Tillis-Alsobrooks proposal, which they viewed as more restrictive for crypto. The CLARITY Act remains stalled in the Senate, with a markup expected in mid-April.
