CLARITY Act Reshapes Stablecoin Reward Structures

The CLARITY Act's Section 404 introduces significant changes to stablecoin platforms by prohibiting yield payments solely for holding stablecoins, aiming to prevent them from functioning like traditional bank deposits. According to NS3.AI, the legislation allows rewards linked to active participation, including transactions, liquidity provision, or governance activities, thereby transforming the structure of crypto rewards. Additionally, the Act requires transparent disclosures and restricts issuer involvement in reward programs, which may present compliance challenges and impact platform partnerships.