A new draft of the proposed Clarity Act, led by U.S. Senator Thom Tillis (R-SC) alongside Senator Angela Alsobrooks (D-MY), is expected this week as lawmakers attempt to resolve a growing regulatory dispute over stablecoin rewards.
Core Disagreement Over Stablecoin Yield
The legislation aims to address a long-standing conflict between traditional banking institutions and crypto companies over whether stablecoin holders should be allowed to earn yield or interest, The Block reported.
Earlier legislation, including the GENIUS Act, prohibits stablecoin issuers from directly paying interest to holders but leaves a regulatory gray area. It does not explicitly ban third-party platforms, such as exchanges, from offering yield products, creating uncertainty in enforcement.
Banks argue that allowing stablecoin yields could pull deposits away …