US Senator Tillis and Alsobrooks Reach Compromise on Stablecoin Yields
Senator Thom Tillis and Angela Alsobrooks have reached a final compromise on stablecoin yield provisions, as reported by Punchbowl News.
The compromise includes a ban on rewards that are "economically or functionally equivalent to deposit interest," but balances that pass the "equivalence test" can still be used for rewards.
Market Mechanism: The compromise reduces compliance uncertainty for stablecoin platforms, directing funds towards compliant products that pass the test, differentiating bank-backed stablecoins from DeFi yield scenarios, and accelerating the U.S. crypto legislative process.
Source: Public Information
ABAB AI Insight
Tillis and Alsobrooks, as key proponents of the CLARITY Act, have reached this stablecoin yield compromise as a result of long negotiations between banking interests and the crypto industry, focusing on distinguishing deposit-like interest from rewards based on actual usage.
On the capital pathway, a clear "equivalence test" framework provides operational space for stablecoin issuers like Tether and Circle while limiting high-interest deposit solicitation, balancing consumer protection with the need for financial innovation.
Similar to the EU's MiCA regulations on stablecoin yields, the U.S. is currently transitioning from a blank slate to detailed federal stablecoin regulation.
Structural Judgment: Essentially a regulatory change, the compromise distinguishes legitimate rewards from disguised deposit interest through the "equivalence test" mechanism, aiming to retain business flexibility for stablecoin platforms while preventing systemic financial risks, thus clearing obstacles for the overall advancement of the CLARITY Act.