Overview
- The bipartisan CLARITY Act draft would prohibit platforms from paying interest on idle stablecoin balances while preserving activity-based rewards such as liquidity provision, staking, governance or network functions.
- The Senate Banking Committee released 278 pages of market-structure text that would divide oversight between the SEC and CFTC, putting stablecoin rewards at the center of the policy fight.
- JPMorgan CFO Jeremy Barnum cautioned on the bank’s Q4 call that yield-bearing stablecoins could create a parallel banking system without prudential safeguards, echoing broader concerns from banking groups.
- Sources say a tighter amendment on rewards may be filed and could have the votes to clear the committee, and crypto firms have warned they may withdraw support or alter products if restrictions broaden.
- The push builds on the 2025 GENIUS Act’s ban on issuer-paid passive yield, with unresolved ethics provisions and election-year timing adding uncertainty ahead of Thursday’s scheduled markup.