US CLARITY Act Talks Advance on Stablecoin Rewards, but Key Disputes Persist

Negotiations over stablecoin rewards, a key sticking point in the US Congress's proposed crypto market structure legislation known as the CLARITY Act, are making progress.

The Block reported on April 22 that key lawmakers involved in the talks, including Democratic Senator Angela Alsobrooks and Republican Senator Thom Tillis, said negotiations on stablecoin rewards had reached a "good spot."

The GENIUS Act, a US stablecoin bill passed in July last year, prohibits issuers from paying interest directly on stablecoins. But it does not bar platforms from offering rewards through other structures. That has allowed exchanges such as Coinbase to maintain systems that provide rewards to users.

Banks have argued that such reward structures could trigger deposit outflows and have called for tighter regulation. The crypto industry has countered that limiting rewards could stifle innovation. That split has been central to negotiations over the CLARITY Act. Recent talks, however, have narrowed differences to some extent over stablecoin interest payments.

Still, other issues remain unresolved, including illicit finance and political conflicts of interest. As a result, a final agreement is likely to take more time.

The markup schedule could also be delayed. Tillis said passing the bill in April would be difficult, while some lawmakers are effectively treating May as the target deadline.