Section 404 of the new CLARITY Act is set to fundamentally reshape how stablecoin platforms offer rewards. The legislation explicitly prohibits platforms from providing yield payments simply for holding stablecoins, a move aimed at preventing them from operating like unregulated bank deposits.
According to an analysis by NS3.AI, the new rules will instead encourage reward structures tied to active user participation. This means platforms can only offer incentives for specific on-chain activities such as executing transactions, providing liquidity in decentralized finance (DeFi) pools, or participating in governance decisions.
Furthermore, the Act mandates full transparency in program disclosures and restricts stablecoin issuers themselves from directly sponsoring or operating these reward programs. This separation is expected to create compliance complexities and may significantly alter existing partnerships and business models within the stablecoin ecosystem. $BTC $ETH $BNB #ETHMarketWatch #MWAM_Crypto
