U.S. Senate Resolves Issue Of Stablecoin Yield

(MENAFN- Yolo Wire) The U.S. Senate appears to have resolved the issue of whether stablecoins can pay yield similar to interest on a bank account.

The Senate has unveiled compromise language in the U.S. Clarity Act that bars stablecoin issuers such as Circle Internet Group (NYSE: $CRCL) from paying yield on reserves while preserving activity-based rewards.

The revised language paves the way for a Senate Banking Committee review and eventual detailed rules from the U.S. Treasury and the Commodity Futures Trading Commission (CFTC).

The new language ends months of negotiations between crypto firms and bank lobbyists.

Banks had been against stablecoin yield over fears it will draw consumers away from their interest-bearing savings accounts.

Stablecoin issuers wanted activity-based reward programs preserved that still enable crypto firms to provide incentives for people using their platforms.

Crypto exchange Coinbase Global (NASDAQ: $COIN) signaled its support for the compromise language immediately.

The next step in the Clarity Act's movement through Congress is for the Senate Banking Committee to formally debate and amend the legislation.

The U.S. Treasury and the CFTC will have a year after the bill officially becomes law to write detailed rules around what cryptocurrency firms can and cannot do with yield-bearing products.

Stablecoins are cryptocurrencies pegged to the value of another asset, typically the U.S. dollar.

The two biggest stablecoins are Circle's USD Coin (CRYPTO: $USDC) and Tether's coin (CRYPTO: $USDT).

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