The U.S. Senate Banking Committee, led by Chair Tim Scott, has released a draft of the Digital Asset Market Clarity Act that explicitly permits crypto firms to offer activity-based stablecoin rewards without those tokens being classified as securities or financial products. Scott said the bill, refined over months of discussions, aims to strike a balance between encouraging innovation and safeguarding legal protections for consumers.
Permissible Rewards and the Red Line
The draft enumerates acceptable reward types. Payment-related incentives tied to transfers, remittances and transactions are allowed; wallet usage, blockchain platform and ecosystem incentives are also permitted. Loyalty programs, staking rewards and subscription-based benefits are on the list. Liquidity providers, collateral providers, governance participants and validators may also receive rewards without triggering regulatory backlash. However, the bill draws a clear line: companies cannot pay interest or yield solely for holding stablecoins, ensuring stablecoin holders are not treated as bank depositors. Crypto industry stakeholders have expressed relief at this boundary, which avoids conflict with banking regulations.
CFTC Launches Innovation Advisory Committee
Newly appointed CFTC Chair Michael Selig introduced the Innovation Advisory Committee, replacing the Technology Advisory Committee. The body will focus on blockchain and artificial intelligence. Selig plans to nominate leaders from the CEO Innovation Council, including executives from Polymarket, Kalshi and Gemini, to advise on digital asset regulation. The move signals an effort to integrate industry expertise into rulemaking.
Community Banks vs. Crypto Advocates
Community banks have petitioned Congress to close what they see as a loophole enabling crypto exchanges and issuers to indirectly offer yields through reward programs. They fear billions of dollars could be siphoned from traditional bank deposits, undermining lending to small businesses and consumers. In response, crypto advocacy groups — the Crypto Council for Innovation and the Blockchain Association — argue that payment stablecoins are not used for loans and that restricting rewards would harm consumer choice and innovation. The debate continues as lawmakers weigh the economic impact of the proposed legislation.