Clarity Act text lets crypto firms offer stablecoin rewards while shielding bank yield
The text released Friday blocks crypto firms from offering stablecoin yield offerings that look like bank deposits, but “bona fide” transactions are allowed.
What to know:
- Text has emerged revealing the Clarity Act compromise worked out between members of the Senate Banking Committee, which would allow crypto firms to keep pursuing stablecoin reward programs.
- As expected, the text prohibits crypto firms from offering yield on stablecoin deposits if that yield is the functional or economic equivalent to banks’ offerings.
- The text comes after months of negotiations between the crypto and banking industries, facilitated by the White House and Senators Thom Tillis and Angela Alsobrooks.
“No covered party shall, directly or indirectly, pay any form of interest on yield (whether in cash, tokens, or other consideration) to a restricted recipient — (A) solely in connection with the holding of such restricted recipient’s payment stablecoins; or (B) on a payment stablecoin balance in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit,” the text said.
This restriction does not apply to incentives “based on bona fide activities or bona fide transactions” that are different from yield generated by interest-bearing bank deposits, the text said, maintaining an approach to rewards that’s similar to what financial firms offer on credit card activity. The restriction does apply to loyalty programs or similar efforts.
