One of the most important drafts for cryptocurrency regulation in the US, a final deal on stablecoin yields is expected to be made public this week as negotiations continue on Clarity Act — one of many key documents that are being signed with the government.
This development shows that even though Congressional work is suspended for the Easter holiday, intense behind-the-scenes contacts are continuing unabated.
It is expected that the draft text will explain how companies aresuing stablecoins can provide rewards to their users. For example, one of the most important aspects of regulation is how these reward mechanisms will be structured without causing deposit outflows from banks. The first draft, which had been agreed upon by Thom Tillis, Angela Alsobrooks and the White House, had received heavy criticism from industry. This clone banned firms in that version from offering direct or indirect interest-like returns on passive stablecoin balances, which only allow activity-based rewards.
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However, some big industry leaders like Coinbase and Stripe argued this approach was not enough and protested that the rule would limit innovation. A more balanced framework is expected to be provided by the new text, based on discussions with both crypto companies and banks.
Senate Banking Committee will mark the bill in April’s final two weeks of April. According to this timeline, “there are about three weeks of critical deliberation before the bill passes the committee and is brought on a Senate floor.”
However, full consensus has not yet reached on issues such as stablecoin yields, decentralized finance (DeFi), token classification and the use of a tokenization. The final meetings are likely to be officially scheduled by Committee Chairman Tim Scott, and will involve intense debate about these issues.
*This is not investment advice.
Thanks for reading This Week Is Critical for Cryptocurrencies: The Clarity Act Text Will Be Released—What’s the Current Status?
