CLARITY Act: White House and Lawmakers Near Deal on New Crypto Rules

There appear to be agreements in the making between the White House and US lawmakers regarding a major new piece of crypto legislation called the CLARITY Act. This bill aims to create clearer rules for the cryptocurrency market in the United States.

Here are the key takeaways from the article:

• What is the debate about? The main sticking point has been the interest (or ‘yield’) paid on stablecoins. These are cryptocurrencies designed to keep a steady value, like being tied to the US dollar. Banks have been worried that if stablecoins offer high interest rates, people might pull all their savings out of traditional bank accounts to buy them.
• What is the tentative plan? Two senators—one Republican and one Democrat—have reached a preliminary agreement. The deal likely bans people from earning interest on stablecoins that they are just holding “passively.” This compromise is meant to protect banks from losing their deposits while still giving the crypto industry room to innovate.
• Why was the bill stalled? The CLARITY Act was expected to pass earlier this year but was put on hold after major crypto companies, such as Coinbase, raised concerns. The crypto industry wanted stablecoin creators to be allowed to share their profits (yield) with the people holding the tokens.
• What happens next? The agreement is not fully finalized, and specific details are still missing. The crypto industry needs to review the proposal first. However, politicians are optimistic: Senator Cynthia Lummis, a major advocate for crypto, says they are “so close” and expects a final deal to come together in the next few days.

Source: CoinTelegraph