While regulatory efforts for the cryptocurrency market in the US continue unabated, a new draft prepared under the “Clarity Act” has brought a notable change to the forefront.
According to the revised text, stablecoin users will be prohibited from earning yields simply for holding their assets. The draft aims to prevent the awarding of rewards tied to stablecoin balances, a step reportedly taken to prevent the formation of a structure similar to a banking system.
It is stated that the regulation in question is particularly influenced by pressure from the traditional finance and banking sector. Coming at a time when discussions about the use case and economic role of stablecoins are intensifying, this step has raised significant questions about the future of the sector. While the draft prohibits returns directly tied to holding balances, rewards based on specific activities are not entirely excluded, although the framework regarding this is not yet clear.
The developments also resonated in the markets. Analyst Joao Wedson noted a decline in the share performance of Circle, the company behind USDC, following the regulatory discussions. According to Wedson, the increasing limitations on stablecoin returns within the regulatory framework directly impact one of the most significant incentives for large-scale adoption of these assets.
However, Wedson stated that these regulations would not eliminate stablecoins but would reshape their roles. He noted that stablecoins remain a fundamental liquidity layer in the crypto market, citing the systemic impact of the TerraUSD collapse in 2022 to highlight the sector’s vulnerability.
According to experts, the relationship between crypto assets and governments will remain inherently tense.
*This is not investment advice.