buy and hold becomes buy and use
In the long negotiation between old financial institutions and new digital ones, U.S. Senators Thom Tillis and Angela Alsobrooks have drawn a careful boundary: stablecoin companies may no longer pay customers simply for holding reserves, but they may still reward those who actively participate on their platforms. The compromise, embedded in the Digital Asset Market Clarity Act, reflects a recurring tension in economic history — the moment an emerging industry grows large enough to threaten the established order, and both sides must find language they can live with. What emerges is not a verdict on crypto's legitimacy, but a negotiated peace that leaves the deeper questions of implementation to regulators yet to act.
- Banks had sounded the alarm that stablecoin yield products were quietly becoming deposit accounts in disguise, threatening the core of their business model.
- The stalemate had frozen the Digital Asset Market Clarity Act since January, with a Senate Banking Committee markup abruptly postponed and months of closed-door negotiations following.
- The compromise text now explicitly bans any yield — cash or token — paid to customers purely for holding stablecoins, while carving out space for rewards tied to real platform activity like trading or token swaps.
- Coinbase, the industry's most exposed player, signaled relief, with CEO Brian Armstrong publicly urging the Senate to move forward and the company's legal chief declaring the language workable.
- The final shape of the rules remains unwritten — Treasury and the CFTC have one year after passage to define what qualifies as legitimate activity-based rewards, leaving significant room for interpretation.
- Anti-evasion clauses buried in the text hint that lawmakers already anticipate creative workarounds, and the broader bill's fate still hinges on resolving other open negotiation points.
Two U.S. senators released compromise language Friday that draws a careful line through the crypto market: stablecoin companies can no longer pay yield simply for holding reserves, but they can still reward customers for actively using their platforms. The agreement between Republican Thom Tillis and Democrat Angela Alsobrooks represents months of negotiation between the crypto industry and traditional banking interests, and it may finally unblock legislation that has stalled since January.
The Digital Asset Market Clarity Act has moved through Congress in fits and starts, with stablecoin rewards emerging as the most contentious detail. Banks argued that crypto firms offering yield on stablecoin holdings looked too much like deposit accounts — their core business. The new text addresses this directly: crypto companies cannot pay interest or yield of any kind to customers simply for keeping stablecoins in their accounts, explicitly protecting what it calls depository institutions whose services are integral to the American economy.
But the compromise is not a total prohibition. Crypto firms can still offer rewards tied to what the text calls bona fide activities or transactions — think credit card cash-back programs. A customer who trades, swaps tokens, or participates in network activity could still receive incentives. One industry insider described the shift as moving from a 'buy and hold' model to a 'buy and use' model, fundamentally changing how yield products function.
Coinbase, which stood to lose the most from strict restrictions, signaled approval. CEO Brian Armstrong posted 'Mark it up' on social media, urging the Senate Banking Committee to move forward. Chief legal officer Paul Grewal said the language preserves activity-based rewards tied to real platform participation — exactly what the bank lobby had asked for.
Implementation, however, remains uncertain. Treasury and the CFTC have one year after passage to issue detailed guidance defining what counts as qualifying activity and how rewards can be calculated. Consumer advocates noted that this rulemaking provision gives regulators substantial latitude — enough that the practical boundaries of the new rules may look quite different from what the text alone suggests. Anti-evasion clauses in the bill hint that lawmakers already anticipate creative workarounds.
Whether the broader Clarity Act can resolve its remaining open points will determine whether the Senate Banking Committee can finally hold its long-delayed markup — a moment the crypto industry has been waiting for since the year began.
Two U.S. senators released compromise language Friday that draws a careful line through the crypto market: stablecoin companies can no longer pay yield simply for holding reserves, but they can still reward customers for actually using their platforms. The agreement between Republican Thom Tillis of North Carolina and Democrat Angela Alsobrooks of Maryland represents months of negotiation between the crypto industry and traditional banking interests, and it may finally unblock a piece of legislation that has stalled since January.
The Digital Asset Market Clarity Act has been moving through Congress in fits and starts, with stablecoin rewards emerging as the most contentious detail. Banks argued that crypto firms offering yield on stablecoin holdings looked too much like deposit accounts—their core business—and threatened their competitive position. The new text addresses this directly: crypto companies cannot pay interest or yield of any kind, whether in cash or tokens, to customers simply for keeping stablecoins in their accounts. The language is explicit about protecting what it calls "depository institutions" whose services are "integral to the strength of the American economy."
But the compromise is not a total prohibition. Crypto firms can still offer rewards tied to what the text calls "bona fide activities or bona fide transactions." Think credit card companies paying cash back for purchases. A customer who trades on a crypto platform, swaps tokens, or participates in network activity could receive incentives for those actions. The distinction matters: the restriction targets passive holding, not active engagement. One person working in the crypto industry described the shift as moving from a "buy and hold" model to a "buy and use" model, fundamentally changing how yield products function.
Coinbase, which had been at the center of these negotiations and stood to lose the most from strict restrictions, signaled approval. CEO Brian Armstrong posted simply "Mark it up" on social media, urging the Senate Banking Committee to move forward with a hearing. The company's chief legal officer, Paul Grewal, went further, saying the language "preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said they wanted." He added that Coinbase was satisfied this should not block the bill's progress.
The actual implementation, however, remains uncertain. The text includes a rulemaking provision directing the Treasury Department and the Commodity Futures Trading Commission to issue detailed guidance within one year of the bill becoming law. That guidance will define exactly what counts as a qualifying activity, how rewards can be calculated, and what factors regulators should consider—balance, duration, tenure, the nature of the incentive program itself. Corey Frayer, director of investor protection at the Consumer Federation of America, noted that the rulemaking language gives regulators substantial latitude. Depending on how they interpret it, crypto firms might be able to conduct yield activities and then distribute returns to customers in ways not yet fully imagined.
The compromise also includes anti-evasion language, suggesting lawmakers anticipated that companies might try to structure workarounds. Tillis and Alsobrooks have been hashing out these details since a Senate Banking Committee markup was postponed at the last minute in January. The White House hosted sessions where bank lobbyists and crypto insiders weighed in on the terms. In March, the two senators announced they had reached agreement on the broad framework. Friday's release of the actual text represents the first public look at the precise wording.
The Digital Chamber, a trade association representing crypto companies, welcomed the release as "an important step toward resolving one of the final issues standing between the Committee and a markup." The group emphasized that rewards programs drive consumer utility and innovation. What happens next depends partly on whether other outstanding negotiation points in the broader Clarity Act can be resolved. If they can, the Senate Banking Committee could finally hold that markup hearing and move the legislation forward—a moment the crypto industry has been waiting for since the year began.
Citações Notáveis
This language preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said they wanted.— Paul Grewal, Coinbase chief legal officer
We are encouraged to see this process moving forward and will continue advocating for the power of rewards to drive consumer utility, competition, and innovation across the digital asset ecosystem.— Cody Carbone, Digital Chamber CEO
A Conversa do Hearth Outra perspectiva sobre a história
So the law says crypto companies can't pay yield on stablecoins just sitting there. But they can pay for activity. How is that different from what banks do?
Banks pay interest on deposits—money you park and forget about. Crypto companies under this rule would have to tie rewards to something you actually do. Trade, swap, participate. It's more like a credit card cashback than a savings account.
But couldn't a company just call holding a stablecoin an "activity" and get around the rule?
That's why there's anti-evasion language in the text. And why the Treasury and CFTC get to write the detailed rules within a year. The lawmakers knew companies would try to game it.
Who wins here—the banks or the crypto companies?
Both, maybe. Banks keep their deposit business protected. Crypto companies keep the ability to offer rewards, just not in the way that directly competed with bank deposits. Coinbase seemed satisfied enough to say "mark it up" and move forward.
What's the real uncertainty then?
How the regulators define "bona fide activity" when they write the rules. That definition could be narrow or broad. It could kill innovation or enable it. Nobody knows yet.