TheBlock
Backers of stablecoins are openly brushing off attempts to restrict yield under the Clarity Act, arguing the industry will route around any cap the way fintechs already route around legacy banking incentives.
"A million different ways to skin the cat," became the framing at a recent industry panel, where the Borderless.xyz CEO pushed back against the idea that rewarding stablecoin holders is structurally dangerous. The fintech sector has been paying yield-style incentives to users for years, he argued, and the U.S. banking system didn't collapse.
MoneyGram's CEO went further, drawing a parallel between stablecoins and fiat currency. As stablecoins are increasingly treated like fiat — settled, stored, and moved through the same payment rails — the argument that they shouldn't earn yield becomes harder to defend, he said. The industry is treating the question not as whether yield will eventually be allowed, but how it will be structured once it is.
Why it matters
The Clarity Act is the legislative vehicle shaping the U.S. stablecoin framework, and the rewards question sits at the heart of bank-lobby opposition. Banks argue that if stablecoin issuers can pass yield to holders, they gain an unfair funding edge over traditional deposits. Industry backers counter that the genie is already out — wallets, neobanks, and rewards programs have offered comparable returns for years through cash-back, loyalty points, and staking proxies.
Market impact
The framing matters for the issuers most exposed to U.S. regulation: Circle ($USDC), Tether, and the bank-led consortia racing to launch their own tokens.
Frequently asked questions
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What is the Clarity Act and what does it do for stablecoins?
The Clarity Act is the U.S. legislative vehicle shaping the federal stablecoin framework. Its central open question is whether stablecoin issuers will be allowed to pass yield to holders, a fight banks are pushing hard to restrict.
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Why do banks want to ban yield on stablecoins?
Banks argue that yield-paying stablecoins give issuers an unfair funding edge over traditional deposits, threatening the deposit base that funds the lending system.
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How would issuers get around a yield ban?
Industry voices expect structured workarounds: wrapped products, off-chain loyalty rewards, fee-free remittance corridors, and cash-back programs that deliver the same economic yield without technically paying interest on the token.
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Which companies are most exposed to the Clarity Act outcome?
Circle ($USDC), Tether, and the bank-led consortia racing to launch their own stablecoins all have direct exposure to how rewards are ultimately treated in the final legislation.
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Why do stablecoin backers think yield is inevitable?
They argue fintechs already pay yield-equivalent rewards through cash-back and loyalty programs without breaking the banking system, and that stablecoins are increasingly settled and stored like fiat — making the case against letting them earn yield harder to defend.
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