Summary
The most important line in the Senate's 616-page digital asset market-structure proposal may be the one telling Americans what stablecoins are not: not deposits, not investment products, not federally insured. Under the proposed Digital Asset Market Clarity Act, crypto companies generally could not pay U.S. customers interest simply for holding payment stablecoins. The bill attempts something more economically consequential than a yield ban — drawing a legal boundary between compensation for possessing digital money and compensation for putting that money to work.
Passive yield would be prohibited. Payments incentives, liquidity rewards, staking benefits and other activity-based compensation could remain permissible. The central prohibition bars a covered company from paying interest or yield — in cash, tokens or another form — solely because a customer holds a payment stablecoin, or in a way economically or functionally equivalent to interest on a bank deposit. The language aims at the account wrapped around the stablecoin, not the token itself.
The bill builds in a large door: rewards tied to legitimate activity or transactions remain permissible if not functionally equivalent to deposit interest, including payments, transfers, conversions, remittances, settlement, merchant rebates, market-making liquidity, collateral, governance, validation and staking. Even balance-based formulas are not automatically prohibited if tied to a qualifying transaction, service or activity. The SEC, CFTC and Treasury would have one year after enactment to jointly clarify the boundary and publish a non-exclusive list of permissible programs.
Key Facts
- CLARITY Act: covered companies cannot pay interest/yield solely for holding a payment stablecoin, or in a way equivalent to bank-deposit interest.
- Prohibition targets the account wrapped around the stablecoin, not the token itself.
- Permissible: rewards tied to payments, transfers, remittances, settlement, merchant rebates, liquidity provision, collateral, governance, validation, staking.
- Balance-based formulas not automatically prohibited if tied to qualifying activity/transaction.
- Stablecoins positioned to compete with payment rails, not bank deposits.
- Marketing restrictions: cannot market payment stablecoins as deposits, investments, or government-insured; cannot describe compensation as risk-free or comparable to deposit interest.
- Knowing/willful violations: Treasury civil penalties up to $5M per violation.
- SEC, CFTC, Treasury get 1 year post-enactment to jointly clarify the boundary and publish non-exclusive permissible-programs list.
- Good-faith reliance on statutory exceptions gets limited opportunity to correct.
Why It Matters
The proposal turns stablecoin yield from a marketing feature into a product-architecture question. A simple "hold $10,000 and earn 4%" sits in the danger zone; a program rewarding payments, liquidity provision or collateral can survive depending on structure. That will push platforms to unbundle products — one balance as payment money (no passive return), another swept into a lending or tokenized money-market arrangement, a third earning transactional incentives.
Economically, the bill separates digital cash from digital investments: stablecoins become the settlement layer while yield migrates to tokenized Treasuries, lending products and other regulated investment vehicles. That could accelerate the convergence of crypto platforms with brokerage models and benefit tokenized Treasury funds — and it gives regulators the difficult job of deciding when a reward is genuinely earned versus deposit interest wearing a crypto label.