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Clarity Act Yield Compromise Is In Sight
The U.S. Clarity Act has been held in limbo since the start of the year, with talks advancing to resolve remaining issues.
Washington experienced a busy week as Senators attempted to reach a deal on stablecoin yield (Todd Trapani / Unsplash)
The U.S. Clarity Act edges closer to a Senate markup.
Recently, several senators and members of the U.S. Senate Banking Committee have revealed that a deal may be reached on a key negotiating issue: stablecoin yields. The Clarity Act appears to have a promising timeline for a full senate markup hearing at the end of April.
The main hurdle has been a sufficient compromise between the banking side arguing for a stricter prohibition on stablecoin yield and rewards altogether, while the broader digital asset industry is working towards a more balanced outcome with some provisions.
Revising the Genius Act is something that is not seen as a realistic or optimal outcome if a deal is not reached in a few weeks' time.
On a technical note, the question is should yields be permitted on a) idle stablecoin balances and b) should any form of rewards be passed onto users by third-parties through various user activity.
These could be any number of beneficial criteria to stablecoin holders, such as: no. of monthly wallet transctions, opting into "Earn" products, or spending balances via physical/virtual cards.
On Friday, Senators Thom Tillis (R) and Angela Alsobrooks (D) may have reached a to meet the demands of both sides, with the White House and industry representatives still to make a comment. If it is sufficient, members of the U.S. Senate Banking Committee will hold a full markup hearing after the Easter break.
Importantly, there are other issues to be fully ironed out as this bill is meant to bring forward digital asset rules and regulations in the U.S. to install market parameters for DeFi and crypto projects.
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