Stablecoin Rewards at Risk as Congress Debates Clarity Act
As Congress finalizes the Clarity Act (CLARITY), stakeholders are urging lawmakers to resist last-minute changes that could scuttle the bill. The section governing stablecoin rewards, in particular, has been subject to intense debate.
The CLARITY Act is a bipartisan effort to establish clear federal standards for financial infrastructure, providing institutions with durable certainty and protecting consumers, expanding choice, and fueling economic growth. A key compromise in the bill addresses stablecoin rewards, prohibiting digital asset businesses from paying interest or yield to holders, except for activity-based incentives tied to economic activity.
However, some critics argue that allowing limited, activity-based rewards risks destabilizing bank deposits and community lending. They propose rewording the section to prohibit 'substantially similar' arrangements, which would create confusion and potentially harm the bill's passage.
The FDIC's 2026 Risk Report found that bank deposits grew about 3.9% in 2025, while community bank deposits grew faster at around 5%. The White House Council of Economic Advisers also found that eliminating stablecoin yield entirely would have a negligible impact on lending, moving it by only 0.02% and 0.026%, respectively.
Supporters argue that CLARITY delivers real benefits for banks by establishing clear federal standards, providing regulatory certainty, and ensuring a level playing field. They caution against last-minute changes that could undo the hard-won compromise and replace it with an amorphous standard that would harm consumers, competition, innovation, and market access.
The Crypto Council for Innovation's CEO, Ji Hun Kim, emphasizes the importance of passing CLARITY to provide regulatory clarity, protect entrenched intermediaries from fair competition, and drive genuine adoption of stablecoins. He notes that activity-based rewards help incentivize merchants, businesses, and consumers to use stablecoins, expanding choice and driving better consumer outcomes.