The US Senate could wipe out $6 billion in crypto rewards this week by closing one specific loophole
The Senate Banking Committee is set to define whether stablecoin rewards offered by exchanges, not issuers, are restricted, potentially eliminating billions in annual incentives.Summary
The US Senate Banking Committee is considering the CLARITY Act on January 15th, where a key legislative fight centers on defining what constitutes a stablecoin "reward" and who can pay it, which could impact $6 billion in annual incentives. The GENIUS Act banned issuer-paid yield, but the CLARITY Act markup will determine if this prohibition extends to platform-funded loyalty rewards or carefully structured affiliate arrangements that route reserve yield to users, effectively bypassing the issuer ban. Banks are lobbying to close this affiliate loophole, arguing that platform rewards function as deposit substitutes, while the crypto industry, including Coinbase, argues that restricting these marketing incentives reduces competition and impacts significant revenue streams. The outcome hinges on whether the Senate treats rewards as a disclosure-only issue or imposes substantive restrictions. If restrictions tighten, the economics of stablecoin distribution change drastically, potentially wiping out billions in annual rewards projected for 2026, depending on the definition of "reward" and whether it captures pass-through economics.
(Source：CryptoSlate)