Coinbase announced on Friday that a major agreement has been reached on a crucial part of a landmark cryptocurrency bill. This deal could pave the way for the legislation to move forward in the U.S. Senate, a significant step for the crypto industry.
The bill faced a standstill earlier this year. Banks had strongly opposed a provision that would let stablecoin issuers and crypto companies offer rewards and yield-bearing products on stablecoins. They worried this could draw away deposits from traditional banks, making it harder for them to fund loans.
However, major crypto players like Coinbase argued that they need to offer these rewards to attract customers. They claimed that preventing them from doing so would be unfair and anticompetitive.
Faryar Shirzad, Coinbase’s Chief Policy Officer, shared on X, “In the end, the banks were able to get more restrictions on rewards, but we protected what matters – the ability for Americans to earn rewards, based on real usage of crypto platforms and networks.” This compromise seems to balance the concerns of both sides.
Punchbowl News reported on the exact wording of the compromise, finalized by Senators Thom Tillis and Angela Alsobrooks. The language includes a broad ban on rewards offered “in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.” This means crypto firms can’t offer rewards that mimic bank interest too closely.
The compromise also directs regulators to create new stablecoin rules. This includes developing new ways for stablecoin companies to disclose information and creating a clear list of what reward activities are allowed, Punchbowl News added. Reuters has not yet confirmed this report.
For a long time, crypto companies have been operating in a “regulatory gray area.” Executives often say this lack of clear rules has held back their businesses. The proposed Clarity Act aims to fix this by creating clear regulations, which should help more people adopt cryptocurrency.
Former President Donald Trump, who sought support from the crypto community during his campaign and whose family has even benefited from their own digital token, has made crypto reform a priority during his second term in office. This political backing could give the bill extra momentum.
