Crypto Firms, Banks Reach Compromise on Stablecoin Rewards in CLARITY Act Talks

U.S. crypto firms have proposed a compromise in negotiations over the CLARITY Act that would permit regional and community banks to issue stablecoins and require stablecoin issuers to deposit a large share of reserves with qualifying banks. The framework aims to decentralize issuance, channel stablecoin reserves into federally regulated banks, and allow limited consumer rewards while imposing guardrails (caps on yields, reserve composition rules favoring U.S. Treasuries and cash, and disclosure requirements). Major issuers such as Circle (USDC) and Tether (USDT) are named as affected parties. Banking groups, including the American Bankers Association, remain concerned about deposit outflows and “disintermediation” that could raise borrowing costs and strain regional banks. Negotiations involve the White House, Senate Banking Committee Chair Tim Scott, and other Congressional stakeholders as lawmakers seek a bipartisan market-structure deal before the election cycle narrows the legislative window. The compromise could set U.S. regulatory precedent for stablecoins globally and is contingent on details: the percentage of reserves required in banks, bank eligibility, and caps on permissible rewards. If finalized, the plan could bring stablecoin reserves onto regulated bank balance sheets, reducing run risk but also creating integration points between crypto and traditional banking. Key keywords: stablecoin rewards, CLARITY Act, reserve mandate, bank-issued stablecoins, USDC, USDT.