Crypto industry officials received their first close look at the revised Digital Asset Market Clarity Act in the Senate, and the key stablecoin wording appears to block rewards tied simply to holding balances. A person familiar with the draft said the language is narrower than expected and still leaves questions about how activity-based rewards would work in practice.
The updated text, announced by Senators Angela Alsobrooks and Thom Tillis, is designed to avoid treating stablecoin rewards like bank deposit interest. It would prohibit payments for passive balance holdings and would also limit any structure that starts to resemble a traditional deposit product.
What the revised language is trying to do
The Senate draft reflects a compromise between crypto firms and banks that have fought over whether stablecoin rewards should be allowed. Bank groups argued that yield on stablecoin balances could compete directly with deposits and pressure lending activity, while crypto companies pushed to preserve incentives for users.
As drafted, the bill would still leave room for rewards linked to user activity, but not to idle holdings. The same source said the mechanics for deciding which activity-based programs qualify remain unclear, which could become a major issue during further Senate review.
Why the Senate review matters
The closed-door reading on Capitol Hill was meant to help clear a hurdle for a hearing in the Senate Banking Committee. That panel would be a key step toward building a final joint version of the bill that could later reach a Senate vote.
A similar version of the Clarity Act already passed the House last year, and another version moved through a markup hearing in the Senate Agriculture Committee. The banking panel now stands as one of the most important remaining checkpoints for the legislation.
Key points in the current draft
- Rewards would not be allowed just for holding a stablecoin balance.
- Programs that look too much like bank deposits would also face restrictions.
- Activity-based rewards may still be possible, but the draft does not fully define the rules.
- The final treatment of stablecoin yield remains one of the biggest points of tension in the bill.
The stablecoin yield debate has slowed the bill’s progress for some time, but it is not the only unresolved issue. Lawmakers and industry participants still expect difficult negotiations over how the legislation should treat decentralized finance, or DeFi, especially regarding illicit finance safeguards.
Other unresolved pressure points
Democratic lawmakers have also pushed for language that would prevent senior government officials from personally profiting from the crypto industry. That proposal has been aimed directly at President Donald Trump, according to the source material.
Those wider disputes matter because the Clarity Act is intended to finish a broader policy shift that started with the GENIUS Act. That law, passed last year, became the first major federal framework for part of the crypto sector and was seen as the opening stage of a larger push.
The Clarity Act is now viewed by industry participants as the second and more consequential step. Supporters say a full market structure law could reduce regulatory uncertainty and open the door to greater participation from institutional investors and developers.
Why the stablecoin rule could shape adoption
Stablecoins are widely used in crypto trading, payment flows, and onchain applications, so the treatment of yield can affect how users move capital. If rewards are limited to active use rather than balances, platforms may need to redesign products that currently rely on passive incentives.
That setup could also favor banks’ argument that stablecoin products should not function like deposit accounts. At the same time, crypto firms may still try to preserve rewards programs that tie benefits to transfers, trading, or other platform activity rather than simple storage.
For market participants, the next Senate revisions will matter as much as the broader headline goal of the bill. The draft’s treatment of yield, DeFi oversight, and ethics-related restrictions may determine whether the Clarity Act can advance as a workable compromise or remain stuck in negotiation.
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