Complete Guide to New Senate Clarity Act Draft Allows Activity-based Stablecoin Rewards
A revised Senate CLARITY Act draft would allow activity-based stablecoin rewards tied to payments, wallets and staking, while barring interest paid solely for holding tokens.
A new US Senate CLARITY Act draft allows crypto companies to offer activity-based rewards to stablecoin users.
The proposal, titled the Digital Asset Market Clarity Act, reveals that certain rewards and incentives tied to the use of stablecoins would be permitted. Still, the provision notes that offering rewards does not cause a stablecoin to be treated as a security or a bank-like product.
“Families and small businesses benefit from clear rules of the road,” Senate Banking Chair Tim Scott, who released the amended draft, said in a statement shared with Cointelegraph. “This bill reflects months of serious work, ideas, and concerns that have been raised across the Committee, and it gives everyday Americans the protections and certainty they deserve,” he added.
Stablecoin rewards have become a major point of contention between crypto companies and banking groups. Banking groups have argued that yield-bearing stablecoin products resemble deposit-taking or unregulated investment vehicles. Crypto companies say such programs function more like loyalty points or payment incentives common in fintech.
Under the draft, the prohibition would not apply to incentives connected to everyday financial activity. These include rewards linked to payments, transfers, remittances and settlements, as well as benefits tied to the use of wallets, accounts, platforms or blockchain networks. Loyalty and promotional programs, subscription-based incentives, and rebates related to the use of stablecoins are also covered.
Related: Banks’ stablecoin concerns are ‘unsubstantiated myths‘: Professor
The exemption extends further into crypto-native activity. According to the text, rewards associated with providing liquidity or collateral, as well as participation in governance, validation, staking or broader ecosystem activity, would be permitted.
The draft clarified that a digital asset service provider “may not pay any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding of a payment stablecoin.”
The US Senate Agriculture Committee has delayed its markup of the crypto market structure bill until the final week of January, with Chairman John Boozman citing the need for more time to secure broad bipartisan support.
Source: CoinTelegraph
