CLARITY Act Bans All Stablecoin Yield: Ending The Shadow Banking Era
New legislative text for the CLARITY Act signals a foundational shift in how the US regulates stablecoin liquidity. The CLARITY Act's Hammer: Stablecoin Yield's Final Sunset? Stablecoin yield is dead. At least, the kind that promised passive returns and fueled the 2022 collapses. The CLARITY Act’s latest draft, reviewed just hours ago in a closed-door Capitol Hill session, effectively codifies this reality by prohibiting any activity “economically or functionally equivalent” to interest for digital asset service providers. This isn't just about banning a specific product. This is a fundamental realignment, an uncomfortable pivot for an industry that thrived on unregulated financial innovation. The implications stretch far beyond the immediate balance sheets of exchanges. Regulatory compliance is evolving to tre...