Key Takeaways
A newly released compromise text for the Digital Asset Market Clarity Act on May 1 seeks to prohibit stablecoin yield that is functionally equivalent to bank deposit interest while permitting rewards for other “bona fide” user activities.
“Mark it up,” Coinbase CEO Brian Armstrong said in a post on social media site X, signaling support from the company that was central to the negotiations.
The legislative text, negotiated by Senators Thom Tillis and Angela Alsobrooks, specifies that a “covered party” cannot pay yield to a recipient solely for holding a stablecoin. However, it carves out an exception for incentives based on genuine transactions, a structure similar to credit card reward programs. The bill directs the Treasury Department and Commodity Futures Trading Commission to establish a formal rulemaking process within one year of passage to define these activities more clearly. This distinction forces a strategic shift for crypto firms from "buy and hold" yield models to "buy and use" reward systems.
Passage of the bill, which could see a Senate Banking Committee markup in May, is seen as critical for unlocking institutional investment in U.S. crypto markets. The act aims to resolve the long-standing jurisdictional conflict between the Securities and Exchange Commission (SEC) and the CFTC, which has created uncertainty for banks and corporate treasuries. Failure to advance the bill past May could delay progress for years, according to Senator Bernie Moreno.
The Clarity Act's focus on defining clear rules for digital assets mirrors other recent regulatory and industry developments. In a parallel move, exchange operators NYSE Arca and Nasdaq have proposed an "85/15" framework to streamline the listing of multi-asset crypto trusts. This proposal would allow products to be listed if at least 85% of their assets, such as Bitcoin or Ethereum, meet existing standards, creating a clearer path for funds that also hold a smaller sleeve of other digital assets.
At the same time, major payment networks are not waiting for final legislative action to integrate stablecoins. Visa recently partnered with WeFi to allow stablecoin spending across its global network, focusing on a "deobanking" model where users retain control of their assets. This initiative, which targets Europe, Asia, and Latin America pending regulatory approval, shows the industry push to bridge blockchain-based value with traditional payment rails using regulated stablecoins as the bridge asset. Together, these legislative and private-sector moves show a market-wide push toward integrating digital assets within established financial and regulatory structures.
This article is for informational purposes only and does not constitute investment advice.
