TechFlow News, May 2, according to a CoinDesk report, newly released provisions of the Digital Asset Market Clarity Act indicate that a bipartisan compromise led by Senator Thom Tillis (R-NC) and Senator Angela Alsobrooks (D-MD) would prohibit stablecoin issuers from offering returns solely based on holding stablecoin reserves. The text states that “financial services provided by depository institutions are vital to U.S. economic strength,” and that stablecoin issuers offering similar services “could impede” such institutions.
The text stipulates that no regulated entity may directly or indirectly pay any form of interest or yield—whether in cash, tokens, or other consideration—to a covered recipient solely: (i) in connection with holding that covered recipient’s payment stablecoins; or (ii) on payment stablecoin balances in a manner economically or functionally equivalent to paying interest or yield on interest-bearing bank deposits.
This restriction does not apply to incentives “based on genuine activity or bona fide transactions,” akin to rewards offered by financial institutions for credit card usage, but does apply to loyalty programs or similar initiatives. The text also includes anti-circumvention provisions and requires the U.S. Department of the Treasury and the Commodity Futures Trading Commission (CFTC) to initiate rulemaking within one year after the bill becomes law to clarify the specific methods and conditions under which crypto firms may offer yield.
Cody Carbone, CEO of the Digital Chamber, stated in a press release that the association “welcomes the public release of the stablecoin yield provisions, marking an important step toward resolving the final key issue between committees and ongoing deliberations.”
