Clarity Act draft draws a line on stablecoin rewards, aiming to prevent deposit-like yield

The latest draft text of the Clarity Act, released Friday, attempts to draw a bright line between two types of stablecoin incentives: (1) rewards that function like interest on a deposit and (2) rewards that are part of ordinary payments or commercial activity.

The core policy goal: stop “deposit-like” stablecoin yield

The draft would block crypto firms from offering stablecoin yield arrangements that look and feel like bank deposits. In practice, that means lawmakers are trying to prevent stablecoin products from mimicking insured bank accounts—where customers place funds and receive a return—without the oversight, capital requirements, and consumer protections that apply to banks.

This approach reflects a long-running concern among regulators and legislators: if stablecoin issuers or platforms can market “safe” dollar-like tokens plus a yield, the product can resemble a deposit substitute, potentially creating bank-run-style risks without the same regulatory backstops.

The carve-out: “bona fide” transactions can still be rewarded

At the same time, the draft text allows “bona fide” transactions—suggesting that certain reward structures tied to real economic activity may remain permissible.

That distinction matters because stablecoins are widely used as payment rails in crypto markets and, increasingly, in cross-border transfers and settlement. Many platforms use rewards to encourage usage—similar to card rewards, merchant rebates, or promotional discounts.

Under the draft’s framing, the key question becomes whether a reward is:

• A transactional incentive (e.g., tied to spending, transferring, settling, or other genuine activity), or
• A passive yield (e.g., paid simply for holding a stablecoin balance in a way that resembles interest on deposits).

Why the line is hard to draw

Even with a “bona fide” carve-out, the boundary between transactional rewards and deposit-like yield can blur:

• Holding-based rewards can be framed as “loyalty”: A platform might argue that paying rewards to holders supports network activity or liquidity, even if the user does nothing.
• Payments incentives can become quasi-yield: If rewards are frequent, predictable, and scale with balance, they can start to resemble interest.
• Marketing and disclosures matter: How a product is described—“earn,” “APY,” “interest,” “savings”—can influence whether it is treated as deposit-like.

The draft’s emphasis on deposit-like characteristics suggests lawmakers want regulators to look at economic substance, not just labels.

Potential impact on stablecoin business models

If enacted as drafted, the Clarity Act language could push firms toward incentive designs that are more clearly linked to activity rather than balances. That could affect:

• Exchanges and wallets that currently offer “earn” features on stablecoins.
• Stablecoin issuers that partner with platforms to distribute rewards.
• Payments-focused stablecoin products that use rebates or discounts to drive adoption.

The likely result is a compliance-driven redesign of rewards programs—favoring transaction-based rebates, merchant-funded incentives, or time-limited promotions over open-ended, balance-based yield.

What changed

The key development is the release of the draft text on Friday, which explicitly blocks stablecoin yield offerings that resemble bank deposits while allowing rewards tied to “bona fide” transactions. That publication provides a clearer legislative signal about which stablecoin incentive structures lawmakers are trying to prohibit versus preserve.

Citations

• CoinDesk — “Tether posts $1.04 billion Q1 profit, reaches $8.23 billion reserve buffer” (May 1, 2026): https://www.coindesk.com/business/2026/05/01/tether-posts-usd1-04-billion-q1-profit-reaches-usd8-23-billion-reserve-buffer
• CoinDesk — “Anchorage Digital and M0 team up to power next wave of regulated stablecoins” (Apr 30, 2026): https://www.coindesk.com/business/2026/04/30/regulated-crypto-custody-firm-anchorage-partners-with-stablecoin-tech-provider-m0

Sources

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