The Digital Asset Market Clarity Act (CLARITY Act) aims to clarify crypto asset regulation. A key point of contention is Section 404, which focuses on rewards for stablecoin holders. This section restricts digital asset service providers from offering interest or yield solely for holding a payment stablecoin. The concern is that such rewards resemble interest and compete with traditional bank deposits. However, the act allows for "activity-based rewards and incentives," including transactions, wallet usage, loyalty programs, liquidity provision, and ecosystem participation. The distinction lies between being paid for simply holding stablecoins versus being compensated for active participation within the platform or ecosystem, potentially leading to debates over what qualifies as participation.

The Digital Asset Market Clarity Act (CLARITY Act) aims to clarify crypto asset regulation. A key point of contention is Section 404, which focuses on rewards for stablecoin holders. This section restricts digital asset service providers from offering interest or yield solely for holding a payment stablecoin. The concern is that such rewards resemble interest and compete with traditional bank deposits. However, the act allows for "activity-based rewards and incentives," including transactions, wallet usage, loyalty programs, liquidity provision, and ecosystem participation. The distinction lies between being paid for simply holding stablecoins versus being compensated for active participation within the platform or ecosystem, potentially leading to debates over what qualifies as participation.