Washington Moves Closer to Defining Rules for Digital Assets

The U.S. Senate moved closer to establishing a formal regulatory framework for digital assets after lawmakers released a revised draft of the CLARITY Act featuring a last-minute compromise on stablecoin rewards, setting the stage for a high-stakes committee battle later this week.

Summary:

New CLARITY Act draft permits “activity-based” stablecoin rewards.
Senators face a Wednesday deadline to file amendments before markup.
Banking groups and crypto firms remain divided over final language.

The updated proposal, unveiled ahead of Thursday’s Senate Banking Committee markup, attempts to balance concerns from traditional banks with demands from the crypto industry by drawing a hard distinction between interest-bearing stablecoins and transaction-based incentives.

Stablecoin Compromise Takes Center Stage

At the heart of the revised framework is a bipartisan compromise negotiated by Senators Thom Tillis and Angela Alsobrooks that seeks to redefine how stablecoin incentives can operate within the U.S. financial system.

Under the draft language, stablecoin issuers would be prohibited from offering passive yield products that resemble traditional savings accounts, a provision designed to prevent consumers from shifting deposits away from commercial banks into tokenized dollar products. Lawmakers and banking lobbyists have argued that unrestricted yield-bearing stablecoins could undermine the traditional deposit base that supports the U.S. lending system.

At the same time, the bill carves out an exception for what lawmakers describe as “activity-based rewards.” These include incentives tied to actual platform usage such as payments, remittances, governance participation, liquidity provision or staking-related activity. Supporters compare the framework to airline miles or credit-card rewards programs rather than investment income.

The compromise is viewed as one of the most consequential elements of the legislation because it addresses a long-running conflict between crypto firms seeking flexibility and banks concerned about stablecoins functioning as shadow banking products.

Senate Faces Critical Week for Crypto Legislation

The legislative timetable has accelerated rapidly. Senators now have until Wednesday to submit amendments before the Senate Banking Committee begins its formal markup process on Thursday, where lawmakers will review the bill line by line and potentially introduce major revisions.

Committee Chairman Tim Scott is pushing to advance the legislation out of committee this week, though the bill would still require 60 votes on the Senate floor to overcome a filibuster hurdle.

Several contentious issues remain unresolved ahead of the markup. Major banking organizations, including the American Bankers Association, continue lobbying against the compromise language, arguing that the “activity-based” exemption could become broad enough to effectively recreate yield-bearing stablecoins under a different label.

Meanwhile, Senate Democrats are preparing amendments focused on ethics restrictions, anti-money laundering protections and decentralized finance oversight. Some lawmakers are also expected to propose stricter rules governing political officials’ involvement with digital assets and stablecoin-related businesses.

Jurisdiction Battle Nears Resolution

Beyond stablecoins, the CLARITY Act represents a broader effort to end years of regulatory uncertainty surrounding digital assets in the United States. The proposal would formally divide oversight responsibilities between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

Under the draft framework, the CFTC would receive primary jurisdiction over digital commodities such as Bitcoin and Ethereum spot markets, while the SEC would continue overseeing assets classified as securities. Stablecoin issuers would also face reserve requirements, audit obligations and disclosure standards designed to align tokenized dollars more closely with traditional payment infrastructure.

Industry reaction has become increasingly favorable as negotiations progress. Brian Armstrong, chief executive of Coinbase, has publicly signaled support for the latest draft after previously criticizing earlier versions of the legislation.

For crypto advocates, the bill represents the strongest chance in years to replace what many describe as “regulation by enforcement” with a rules-based framework. For critics, however, the debate over stablecoin rewards highlights how difficult it remains to integrate blockchain-based finance into the existing banking system without creating new systemic risks.

The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.

Author

Alexander Zdravkov

Reporter at CoinsPress

Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.