Stablecoin Backers Say Rewards Will Persist Despite Clarity Act

Stablecoin platforms plan to continue offering incentives such as signup bonuses, activity-based rewards and other benefits even if the Clarity Act bars payments tied solely to holding digital-dollar tokens.

The Clarity Act passed the House and is under consideration in the Senate. Its latest draft prohibits issuers from paying yield only for holding stablecoins. Senators filed more than 100 amendments this week aimed at tightening enforcement or closing perceived loopholes.

Banking groups including the American Bankers Association and the Bank Policy Institute wrote to senators urging stronger language. They argued exceptions in the bill could let platforms steer customers toward larger stablecoin balances at the expense of bank deposits and raise the risk of deposit outflows.

Banks say deposit flight is the main concern: if customers move funds from bank accounts into higher-yield stablecoin holdings on crypto platforms, lenders’ ability to make loans could be reduced. Proponents of stricter limits say barring interest-like payments on stablecoin balances protects traditional deposit funding.

Industry participants contend bans on simple holding rewards will not prevent platforms from transferring value to users. Kevin Lehtiniitty, chief executive of Borderless.xyz, predicted firms would pivot to alternate incentives: “If it’s not rewards for holding balances, it’s going to be rewards in some other way, shape, or form,” including activity-based rewards and signup bonuses. He added that entrepreneurs will design other financial products to deliver benefits to customers.

Participants pointed to fintech high-yield accounts that have existed for years and noted those offers did not trigger a broad collapse in the banking system. Industry representatives said rewards are a primary tool for growing user bases and that companies have incentives to route benefits to customers.

Stablecoins are digital tokens pegged to the U.S. dollar and are typically backed by liquid assets such as Treasury securities. The market has grown rapidly, led by issuers including Tether and Circle. Last year’s GENIUS Act and rising industry interest have accelerated debate over how to regulate payments and incentives.

Major financial firms and payment networks are exploring stablecoin and blockchain payment projects. Firms including JPMorgan, Citigroup and BlackRock, along with Visa and Mastercard, are involved in development and research; some bank executives have discussed issuing dollar-pegged tokens of their own.

MoneyGram CEO Anthony Soohoo noted that some partners and jurisdictions increasingly treat tokens like USDC as equivalent to U.S. dollars and asked, “If you really can treat it like a real currency, should you be able to use it and earn yield on it?”

Senators continue to weigh amendments. The final legislative language will determine whether explicit prohibitions on paying yield for holding stablecoins remain or whether platforms will instead deploy alternate incentive structures to deliver value to users.