Clarity: the overhaul of remuneration models for stablecoins

DeFiDoctor · 2026-01-31T05:07:04+00:00

The Clarity Act significantly alters stablecoin regulation in the West by banning passive rewards for ownership and emphasizing user engagement for earnings. It mandates transparency in rewards and poses compliance challenges for issuers, while fostering potential long-term legitimacy in the sector.

DeFiDoctor

2026-01-31 05:07:04

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The Clarity Act marks a major turning point in the regulation of stablecoins in the West. According to analyses by NS3.AI, this legislation fundamentally changes how platforms can compensate stablecoin holders, imposing a clear distinction between passive and active activities.

Section 404 of Clarity: End of Unrewarded Yields

Section 404 of the Clarity Act strictly redefines the conditions for compensation. It bans yield payments granted solely for holding stablecoins, a common practice until now. The stated goal is to prevent these financial instruments from turning into traditional bank deposit accounts. This prohibition forces issuers to radically rethink their capital raising and user retention strategies.

What rewards are permitted under Clarity?

Nevertheless, Clarity allows rewards related to an actual user participation. This includes income from transactions, providing liquidity on decentralized markets, or participating in governance mechanisms. This flexibility enables platforms to maintain attractive incentives, but within a more transparent model linked to real engagement. NS3.AI emphasizes that this approach aims to clearly identify stablecoins as means of exchange, not as traditional investment products.

Transparency and mandatory disclosures

The law also imposes enhanced disclosure obligations. Issuers must clearly inform users about the exact nature of rewards, their conditions, and associated risks. Furthermore, the law limits the direct involvement of issuers in managing reward programs, requiring a certain independence to avoid conflicts of interest.

Compliance challenges and strategic reorganization

These new requirements pose significant compliance challenges for platforms. They will need to rethink their partnerships with liquidity providers and adjust their business structures. Clarity in regulation also means increased costs for audits and restructuring. For stablecoin issuers, Clarity thus represents a short-term constraint but potentially an opportunity for sector legitimacy and consolidation in the long run.

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