Lawmakers in the U.S. are increasingly focused on whether to prohibit stablecoins from offering rewards like interest, as they race to complete new cryptocurrency rules before their deadline.
In late March 2026, debates heated up between banks and crypto companies over stablecoins. Banks wanted to limit those that earn interest, but crypto firms argued this could hinder the growth of cryptocurrency adoption.
CLARITY Act Stalls Over Stablecoin Yield Dispute
Progress on the CLARITY Act, a Senate bill designed to create clear rules for the U.S. cryptocurrency market, has stopped. Lawmakers couldn’t agree on whether companies issuing stablecoins should be allowed to offer interest. The bill, which has presidential support, also seeks to better define different types of digital assets.
Banks are urging lawmakers to block rewards on stablecoins that function like interest on savings accounts. Currently, traditional savings accounts earn between 0.01% and 0.50% per year, but some crypto companies offer around 3.5% to 4% on stablecoins like USDC. Banks worry this difference could cause people to move their money out of traditional banks.
The main disagreement is whether stablecoins, which are valued at one dollar, should simply be used for making and completing transactions, or if they should also be allowed to offer returns like savings accounts and money market funds, potentially competing with traditional banking products.
Retail Participation and Exchange Revenue at Risk
Banning rewards for simply holding crypto could discourage regular investors. Many people currently earn returns by keeping their money in stablecoins while they look for times to trade. Taking away these rewards might decrease the amount of money flowing into crypto and make it harder to buy and sell digital assets.
Crypto exchanges could also be affected. Companies like Coinbase, Kraken, and Gemini currently earn money from the stablecoins held on their platforms through interest and investment strategies. If people deposit fewer stablecoins, these exchanges might see lower revenue and less activity.
The use of stablecoins might decrease. Stablecoins that offer interest have gained popularity when markets are unsteady, as they let people keep their money in a stable form while also earning some profit.
Crypto Industry May Adapt Despite Regulatory Pressure
Even though there are worries about these changes, the outcome might not be all bad. Crypto companies have dealt with similar rules before by changing how they reward users. Instead of paying interest directly, they might start offering rewards for things like trading, making payments, or helping to provide liquidity.
If regulations become stricter, programs that offer rewards for staking crypto could move outside the U.S. This would let companies continue providing those rewards while still following the rules in other countries.
Most industry experts agree that clear regulations are the most important factor. The Clarity Act seeks to specifically define digital commodities and securities, which could lower the risk of legal issues.
Even if earning rewards simply by holding crypto is limited, having clearer regulations could help the crypto market grow and become more innovative over time.
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2026-03-23 15:38