Crypto Regulation Stalls as Stablecoin Rewards and Enforcement Concerns Mount
The CLARITY Act is set to face a crucial Senate vote on Tuesday, but its passage is far from guaranteed. Despite revisions made in response to Democratic requests, several groups have expressed concerns about different aspects of the bill.
Banking groups have pushed back against stablecoin rewards, arguing that existing language could allow for incentives that resemble deposit interest. This has sparked a narrower question within US crypto regulation: how can stablecoins offer rewards without operating like bank deposits?
State officials and developers have also raised concerns about the bill's provisions. New York Attorney General Letitia James warned Congress in July that the CLARITY Act could restrict state enforcement, while a bipartisan group of attorneys general has challenged limits on state anti-fraud and registration powers.