A newly revised draft of the Digital Asset Market Clarity Act signals a softer regulatory stance toward rewards linked to stablecoin use, opening the door for crypto companies to continue offering incentives without triggering securities or banking classifications.
The proposal makes it clear that providing such benefits would not automatically transform a stablecoin into a regulated investment product or a bank-like deposit.
Key takeaways:
Stablecoin rewards would be allowed without classifying tokens as securities or bank deposits
Incentives tied to usage are permitted, but interest for simply holding stablecoins is not
The draft reflects a compromise between crypto firms and regulators amid banking pushback
The updated text was released by Senate Banking Committee Chair Tim Scott, who emphasized that the goal is to establish predictable rules while protecting consumers.
At the center of the debate is whether rewards tied to stablecoins amount to interest. Banking groups have repeatedly warned that yield-style incentives resemble deposits or shadow investment products operating outside traditional supervision. Crypto firms counter that these programs are closer to familiar fintech perks such as cashback, loyalty points, or usage-based discounts rather than savings accounts.
What the draft allows – and where it draws the line
The draft legislation sides largely with the crypto industry’s interpretation. It explicitly allows incentives connected to routine financial activity, including payments, transfers, remittances, and settlement services. Benefits related to the use of digital wallets, trading platforms, accounts, or blockchain networks are also carved out, along with promotional campaigns, subscription-style perks, and rebate programs that encourage stablecoin adoption.
Beyond everyday payments, the bill also accommodates crypto-native behavior. Rewards linked to providing liquidity or collateral, taking part in network governance, validating transactions, staking tokens, or contributing more broadly to a blockchain ecosystem would remain permissible. However, the proposal draws a firm boundary by stating that service providers cannot pay interest or yield purely for holding a payment stablecoin, regardless of whether compensation comes in cash, tokens, or other forms.
Progress on the wider crypto market structure framework has been slower. The Senate Agriculture Committee has postponed its markup of the legislation until the final week of January, with Chair John Boozman citing the need for additional time to secure bipartisan consensus.
Meanwhile, opposition from parts of the traditional banking sector continues to intensify. A coalition of US community banks recently urged lawmakers to tighten the language of the separate GENIUS Act, arguing that stablecoin issuers are exploiting gaps in the law to funnel yield to users indirectly through exchanges and intermediaries. According to the bankers, such practices could drain billions of dollars from local banks, undermining lending to small businesses, farmers, students, and homebuyers.
Crypto advocacy groups have pushed back strongly. The Crypto Council for Innovation and the Blockchain Association told the Senate Banking Committee that payment stablecoins are not used as a source of loan funding and warned that restricting reward programs would curb innovation and limit consumer choice. As Congress weighs these competing narratives, the revised CLARITY Act draft suggests lawmakers may be leaning toward allowing incentive-driven stablecoin models to coexist with traditional finance—at least for now.
