U.S. Senate "Clarity" Act draft to be announced next week... Stablecoin yield restrictions may be revised

The draft of the U.S. Senate cryptocurrency market structure bill, the 《CLARITY》 bill, is expected to be released next week. However, industry opposition to the stablecoin yield limitation provisions is growing louder, and whether the bill’s contents will be amended is drawing close attention.

According to Eleanor Terrett’s report for Crypto in America on Friday, the Senate Banking Committee is prepared to release the bill draft at the earliest next week. The bill is seen as the core legislation that would establish a regulatory framework for the cryptocurrency market.

Stablecoin yield ban provisions spark controversy

It is understood that the latest draft released this week includes a provision that broadly prohibits providing “direct or indirect” interest or yield to assets such as stablecoins and similar deposit-like assets.

Instead, it would allow “activity-based incentives,” such as points and promotional rewards, but the specific permitted scope would be authorized to be determined by the regulator within a year. At the same time, to prevent regulatory circumvention, detailed rules are also expected to be set.

The industry has reacted strongly to this change. Some critics argue that the provision could benefit traditional finance and weaken reward programs designed to attract users to participate.

The market also reacted immediately. On Tuesday, when the relevant news broke, the share price of Circle ($CRCL), the issuer of the stablecoin USDC, plunged by about 20%, falling to around $100 (approximately 150,900 won).

Coinbase formally states its opposition

In the meantime, as Coinbase conveyed to the Senate its stance that it cannot support the provision, the conflict has intensified further.

David Duong, Chief Global Investment Research Officer at Coinbase, emphasized that the industry is preparing a joint response, and that it is necessary to amend the bill to protect customers and maintain a sustainable rewards structure.

There are three core points under discussion: when the Senate Banking Committee will determine the official review schedule, how much the draft’s contents will be modified, and in what form the industry—including Coinbase—will submit alternative proposals.

On the other hand, the total market capitalization of the entire cryptocurrency market has recently fallen to about $2.26 trillion, and regulatory uncertainty is affecting investor sentiment.

While the bill seeks a compromise that allows certain incentives alongside tighter yield regulation, industry warns that excessive restrictions may stifle innovation and consumer choice. After the draft is released, the formal power struggle is expected to continue.

Article summary by TokenPost.ai

🔎 Market insights

The U.S. Senate《CLARITY》 bill draft is about to be released, and the stablecoin interest ban provision has become the central point of dispute. Growing regulatory uncertainty is increasing market volatility, including the sharp drop in Circle’s share price.

💡 Key strategy points

Be prepared for the potential reduction of the stablecoin base-yield model. It is crucial for exchanges and DeFi platforms to design alternative incentive structures. It is expected that the share price volatility of relevant companies will expand along with the direction of regulatory policy.

📘 Terminology

Stablecoin: a cryptocurrency whose value is pegged to fiat currencies such as the U.S. dollar

The CLARITY bill: a proposed U.S. legislative initiative aimed at defining the cryptocurrency market structure and regulatory standards

Activity-based incentives: a reward structure paid based on specific behaviors such as trading and usage

💡 Frequently asked questions (FAQ)

Q. Why do stablecoin interest ban provisions cause controversy? The provision limits platforms from providing interest-yield benefits to users, which may reduce investment appeal, leading to controversy. The industry views it as favorable regulation for traditional finance and strongly opposes it. Q. What impact will the bill have on the market? Due to regulatory uncertainty, the share prices of relevant companies and the entire cryptocurrency market are affected. In practice, the plunge in Circle’s share price shows that investor sentiment has been dealt a blow. Q. What should be watched in the future? Whether the Senate bill draft will be amended and how the industry will respond are the core issues. In particular, how the scope of the interest ban and the standards for permitted incentives will be determined is expected to shape the market’s direction.

TP AI Notice

This article was summarized using a language model based on TokenPost.ai. The main content of the body may be omitted or may not match facts.