Lawmakers Move to Clarify Stablecoin Rewards in CLARITY Act

• Stablecoin reward rules near release as lawmakers refine CLARITY Act language.
• Coinbase and industry groups draft counterproposal to adjust reward limits.
• Lawmakers revise DeFi provisions to strengthen protections for developers.

U.S. lawmakers are preparing to release new legislative language addressing stablecoin yield and reward structures, as disagreements between policymakers and industry participants continue to shape the direction of the proposed crypto framework.

According to Eleanor Terrett, the office of Thom Tillis plans to publish detailed provisions next week, while discussions with stakeholders remain ongoing. The anticipated draft is expected to clarify how stablecoin rewards can be structured under the broader CLARITY ACT.

Industry Pushback Over Reward Restrictions

The planned release follows concerns raised by major crypto firms, including Coinbase, regarding earlier proposals presented to a limited group of industry representatives. Those discussions included provisions that would restrict how companies distribute rewards tied to stablecoin holdings.

Specifically, the proposal reportedly introduces a broad limitation on reward mechanisms, prohibiting payouts on idle balances while allowing only activity-based incentives. These incentives must not resemble traditional bank deposit interest.

David Duong, Global Head of Investment Research at Coinbase, stated that industry participants are coordinating a formal response. The counterproposal aims to outline targeted revisions designed to preserve reward functionality while addressing customer protection concerns.

Legislative Coordination and Ongoing Negotiations

The development comes after Senator Tillis and Angela Alsobrooks reached an agreement with the White House to include language addressing stablecoin rewards within the CLARITY ACT. The agreement is intended to resolve tensions between traditional banking institutions and crypto firms over how such rewards should be regulated.

At the same time, Tim Scott, Chair of the Senate Banking Committee, confirmed that discussions are ongoing among the White House, Republican lawmakers, and Democrats. He indicated that efforts are focused on finalizing mutually agreed language that could advance the bill through the legislative process.

DeFi Provisions and Developer Protections

Separately, Cynthia Lummis addressed concerns surrounding decentralized finance provisions in the bill. She responded to claims that certain sections could weaken protections outlined in the Blockchain Regulatory Certainty Act, which is designed to safeguard non-custodial developers.

Lummis stated that recent revisions to Title 3 of the CLARITY Act aim to strengthen protections for developers and DeFi participants. She emphasized that lawmakers from both parties have worked in recent weeks to revise the provisions, aiming to ensure legal clarity while maintaining support for decentralized innovation.

Related: Brian Armstrong Puts 19% Stablecoin Revenue Before Clarity Act