Stablecoin reward compromise preserves exchange yields
The compromise language in the US Clarity Act preserves stablecoin rewards programs for exchanges by tying yields to customer activity, mitigating a major threat from the banking lobby.
The argument
The guest argued that while banks sought to eliminate stablecoin yields to prevent deposit flight, the compromise allows rewards based on commercial activities like trading or custody. This keeps programs like Coinbase's USDC rewards workable and supports US dollar stablecoin adoption.
The thesis, stress-tested
✓ What validates it
- ✓Final bill passage with the compromise language intact
- ✓Regulatory rulemaking clarifying that standard exchange activities qualify for rewards
▸ Risks discussed
- ▸Future rulemaking could restrict what qualifies as valid customer activity
- ▸Ongoing lobbying from banking groups to completely ban stablecoin yields
- ▸Legal challenges over the definition of 'economically equivalent' yields
Hear it yourself
"But, yeah, this is what's been holding it up. And we do have new language which says, quote, no covered party shall directly or indirectly pay any form of interest on yield, whether in cash, tokens, or other consideration to a restricted recipient, a, solely in connection with the holding of such restricted recipients' payment stablecoins, or b, on a payment stablecoin balance in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest bearing bank deposit. So explain what that means and whether you feel that this language is a win for the banks or the crypto industry."
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