A revised draft of the US Senate’s Digital Asset Market Clarity Act (CLARITY Act) sets new boundaries for stablecoin rewards. The text would allow activity-based stablecoin incentives linked to real use, while it would block any interest or yield paid only for holding payment stablecoins. Lawmakers framed the change as a way to create clearer rules for consumers and businesses that use dollar-linked tokens for payments and settlement.
The draft also states that offering permitted rewards would not, by itself, turn a payment stablecoin into a security or a bank-style product. That point seeks to reduce uncertainty for platforms that run loyalty programs or usage incentives tied to stablecoin activity. The updated language keeps stablecoin rewards in the market structure debate, where policymakers weigh innovation goals against bank deposit concerns.
The draft would prohibit a digital asset service provider from paying any form of interest or yield solely for holding a payment stablecoin. The prohibition covers payments in cash, tokens, or any other form of consideration. This approach targets programs that resemble savings yield on an inactive balance.
Lawmakers designed the restriction to address concerns that yield-like stablecoin programs can mimic deposit products without bank rules. Banking groups have warned that reward programs could draw funds away from community banks. Crypto firms have argued that many incentives operate like fintech loyalty benefits. The draft reflects a compromise that tries to separate everyday incentives from balance-based interest.
The text also focuses on how platforms structure rewards. Under this framework, a provider can still offer incentives when a user performs a defined action. However, the provider cannot pay a return when the user only holds the stablecoin with no activity. This structure creates a test based on behavior rather than on the token alone.
The draft includes a broad exemption for incentives connected to daily financial activity. It allows rewards linked to payments, transfers, remittances, and settlements. It also allows benefits tied to the use of wallets, accounts, platforms, or blockchain networks. This language aims to protect stablecoin use in payment flows and consumer applications.
The draft also covers loyalty and promotional programs. It allows subscription-based incentives and rebates related to stablecoin usage. These provisions matter for exchanges and wallet providers that offer points, fee discounts, or cashback-style rewards when users transact.
The exemption also extends into crypto-native activity. The text permits rewards linked to providing liquidity or collateral. It also allows incentives tied to governance participation, validation, staking, or broader ecosystem activity. This section addresses common on-chain activities that require users to lock assets, support network operations, or contribute resources.
Also Read: Crypto News: CLARITY Act Nears Senate Markup as Stablecoin Rewards Debate Grows
The revised approach could reshape how stablecoin reward products appear in the US market. Platforms may redesign programs to connect rewards to transactions or verified actions.
They may also add clearer disclosures to show how users qualify for benefits. In turn, consumers could see fewer rewards for idle balances and more rewards tied to payment use or on-chain participation.
Furthermore, the broader bill aims to clarify oversight roles across federal agencies for digital asset markets. Lawmakers expect the market structure framework to define responsibilities and set compliance expectations for service providers. The stablecoin rewards section fits into that effort by spelling out which incentives lawmakers view as compatible with payment stablecoins.
The Senate still needs to move the draft through committee steps before a floor vote. Lawmakers must also align Senate and House approaches before any final legislation can reach the president. Until then, the updated CLARITY Act draft signals the direction of travel: it supports activity-based stablecoin rewards, while it restricts yield that looks like interest on passive holdings.