Senate Releases Amended CLARITY Act Ahead of Markup as Stablecoin Yields Come Into Focus

Amended CLARITY Act

The crypto bill only permits the distribution of stablecoin rewards in connection with activities such as staking, liquidity provision, providing collateral, and governance purposes. This provision further expands the scope of the GENIUS Act, as, under that legislation, only stablecoin issuers were prohibited from distributing yield on stablecoins.

This development follows months of bank lobbying, in which banking stakeholders urged senators to restrict stablecoin rewards and extend the prohibition to crypto service providers such as Coinbase. Meanwhile, Coinbase and other crypto firms have also been pushing against provisions in the CLARITY.

CoinGape reported that Coinbase warned it may reconsider backing the CLARITY Act due to DeFi and stablecoin reward restrictions. The crypto exchange had warned that such a provision hinders innovation in the country.

Legal expert Jake Chervinsky also commented on the release of the amended version of the crypto bill, noting that a lot has changed since the draft that came out last September. “Amendments are due by 5 pm ET, so its a mad scramble today identifying critical issues to fix in markup. Sadly, there are many,” he added.