Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
This week’s session of the U.S. Congress took up the “Clarity Act” bill, which seeks to regulate the work of digital currency platforms and prevent them from acting as banks, especially when it comes to stablecoin rewards.
Under the new draft, stablecoins will be prohibited from offering any returns or interest, directly or indirectly, to prevent them from turning into something akin to a bank deposit account.
The ban includes all digital asset service providers and their partners to fill any potential regulatory gaps.
In return, the program allows activity-based rewards such as loyalty programs and promotions, provided they are not classified as financial benefits.
Regulators such as the Securities and Exchange Commission, Commodity Futures Trading Commission and Treasury Department will also be required to clearly define these incentives and the mechanisms for their enforcement.
The project has sparked mixed reactions in the industry, with some seeing it as more restrictive and limiting the platform’s ability to design attractive incentives, while others see it as a logical compromise between balancing innovation and guarding against bank risks.
Also read:
Gold also failed to emerge as a safe-haven asset and fell sharply due to geopolitical tensions
