What does the Digital Asset Market Clarity Act say about stablecoin yield?

The Digital Asset Market Clarity Act draft bans crypto firms from offering yield on stablecoins if it resembles interest from bank deposits. This means users cannot earn returns just by holding stablecoins. However, the bill still allows rewards tied to actual activity on crypto platforms.

Why is stablecoin yield being restricted under the Clarity Act?

Lawmakers want to prevent crypto firms from competing directly with banks on deposit-like products. The concern is that stablecoin yield products could function like savings accounts without the same regulation. This rule aims to protect the traditional banking system.

What types of crypto rewards are still allowed?

The bill allows rewards linked to “bona fide” activity, such as using a platform, trading, or participating in a network. These are similar to cashback or loyalty rewards in traditional finance. Passive “hold-to-earn” yield models are not allowed under this framework.

How will this affect crypto companies like Coinbase?

Crypto firms like Coinbase may need to redesign their reward systems. Instead of paying yield for holding stablecoins, they will likely shift to activity-based incentives. This could change how users interact with platforms and how products are structured.

What did Coinbase say about the Clarity Act changes?

Coinbase chief legal officer Paul Grewal said the language preserves rewards tied to real user participation. He indicated the company is satisfied with the compromise. This suggests major crypto players see the proposal as workable.

How could this impact stablecoin users?

Users may no longer earn passive income from simply holding stablecoins. Instead, they would need to actively use platforms to receive rewards. This shifts stablecoins from a savings-style product to a more utility-driven asset.

What are the bull and bear cases for crypto after this proposal?

The bull case is that clearer rules could support long-term growth and regulatory acceptance. The bear case is reduced appeal of stablecoins for passive income investors. This is a mixed outcome depending on how the market adapts.

How might this affect crypto adoption in the US?

This could slow adoption among users seeking yield products similar to bank accounts. However, it may strengthen trust in the sector by aligning it with regulatory expectations. Over time, this could support more sustainable growth.

Clarity Act allows crypto rewards bans bank-like yield

Written by Jon CuthbertPublished May. 2 2026Last Updated May. 2 2026

New draft text of the Digital Asset Market Clarity Act would block crypto firms from offering stablecoin yields that resemble bank deposit interest while allowing activity-based rewards.

The compromise, negotiated by Thom Tillis and Angela Alsobrooks, aims to protect traditional banking functions while preserving crypto-native incentives tied to platform usage.

The proposal prohibits firms from paying yield solely for holding stablecoins, but permits rewards linked to “bona fide” transactions, signalling a shift toward utility-driven crypto incentives.

The text reflects months of negotiations between crypto firms, banking lobbyists and policymakers, with backing from the White House to resolve a key sticking point in market structure reform.

Industry participants said the changes would force companies to redesign reward models from passive “hold-to-earn” structures toward active “use-based” systems tied to network participation.

“This language preserves activity-based rewards tied to real participation on crypto platforms and networks,”

Said Paul Grewal.

Regulators including the Treasury Department and Commodity Futures Trading Commission are expected to define implementation rules within a year, leaving uncertainty over how flexible the final framework will be.