A Major Debate Is Raging Behind Closed Doors in the Crypto Industry: Significant Disagreements Have Emerged in Clarity Act Discussions

A new draft law regarding stablecoin yields in the cryptocurrency sector has sparked significant disagreements among industry leaders.

A new regulatory document drafted in the US proposes prohibiting platforms from offering direct or indirect returns to users through “passive stablecoin balances,” while allowing reward mechanisms tied to specific activities only to a limited extent. This draft has sparked intense debate among both industry representatives and financial circles.

A heated debate erupted yesterday during an industry conference call between representatives from cryptocurrency exchanges, fintech companies, and venture capital firms. According to sources who attended, the meeting turned into a “shout-out” atmosphere. Some participants described the regulation as impractical, while others argued it was a necessary step to strike a balance between the industry and traditional finance.

The debates also resonated on social media. Particularly harsh criticism of the bill was prominent. Some users argued that the Senate had succumbed to pressure from the banking sector and that this regulation could negatively impact crypto adoption. The impact of these discussions was also felt in the markets. Shares of stablecoin issuer Circle lost approximately 20% of their value, while shares of cryptocurrency exchange Coinbase closed the day down about 10%. Analysts stated that these declines were influenced by both the reaction to the proposed yield ban and the agreement between rival Tether and a major US accounting firm for reserve auditing.

The panic arose after closed-door meetings held on Capitol Hill on Monday. These meetings, to which a limited number of industry representatives were invited, provided participants with a brief overview of the draft legislation, but they were not permitted to keep it. The draft regulation is the product of approximately two months of negotiations between the White House, members of the Senate Banking Committee, and representatives from the crypto and banking sectors.

According to the draft, offering interest-like returns on stablecoins will be broadly prohibited. All practices deemed “economically or functionally equivalent to interest” are planned to be included in this scope. However, activity-based rewards such as loyalty programs or promotional campaigns will be possible under certain conditions. Regulators are expected to clarify which incentives will be permitted and how potential abuses will be prevented within a year.

*This is not investment advice.