Overview
- The latest CLARITY Act draft bans paying interest or yield for simply holding payment stablecoins but permits activity-based incentives such as liquidity provision, staking, governance and transactions.
- Coinbase CEO Brian Armstrong said the exchange cannot back the bill, citing provisions he argues would end stablecoin rewards, restrict DeFi, curb the CFTC’s role and hamper tokenized equities.
- Banking groups are lobbying for tighter curbs on platform rewards, and JPMorgan CFO Jeremy Barnum warned that yield-bearing stablecoins could create a dangerous parallel banking system.
- Policy sources report that more restrictive amendments on rewards could be introduced and may have enough support to clear the committee, raising uncertainty for the bill’s trajectory.
- The 278-page proposal would divide oversight between the SEC and CFTC and set new market-structure rules, with the committee slated to debate and vote on amendments on Thursday.