"The legislation's most contested provision - Section 404, which governs stablecoin yield - reached its current form through three stages of negotiation. On May 1, the compromise text became public. On May 4, Senators Tillis and Angela Alsobrooks (D-MD) issued a joint statement declaring the deal final, saying they "respectfully agree to disagree" with continued banking industry pressure."
"The final language bars stablecoin issuers and affiliated digital asset service providers from paying yield on stablecoin balances if that yield is the functional or economic equivalent of bank interest. Activity-based rewards - cashback on payments, transaction-based incentives, and rewards tied to commerce - remain permitted. Holding a stablecoin with no activity generates no return."
"Chairman Tim Scott (R-SC), Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC) issued the bill text alongside a section-by-section summary. "This bill reflects serious, good-faith work across the committee and delivers the certainty, safeguards, and accountability Americans deserve," Scott said. "It puts consumers first, combats illicit finance, cracks down on criminals and foreign adversaries and keeps the future of finance here in the United States.""
The U.S. Senate Banking Committee released the full Digital Asset Market Clarity Act text ahead of a scheduled Senate markup. The bill includes a section-by-section summary and is presented as providing certainty, safeguards, and accountability while prioritizing consumers and combating illicit finance. A key contested provision, Section 404, governs stablecoin yield. The final language bars stablecoin issuers and affiliated digital asset service providers from paying yield on stablecoin balances when that yield is the functional or economic equivalent of bank interest. Activity-based rewards remain permitted, including cashback on payments, transaction-based incentives, and rewards tied to commerce. Holding a stablecoin without activity generates no return.
#stablecoins #digital-asset-regulation #us-senate-banking-committee #stablecoin-yield #illicit-finance
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