A new draft of the Clarity Act, now under discussion in the U.S. Congress, has ignited widespread debate within the cryptocurrency industry, particularly over new restrictions targeting stablecoins. In an analysis published by 10x Research, experts warn that the proposed legislation could have far-reaching impacts on the decentralized finance (DeFi) ecosystem, as well as on projects that issue a range of digital tokens.
Ban on stablecoin yields raises concerns
The proposed bill would explicitly prohibit earning interest, rewards, or similar returns from stablecoin holdings. If enacted, this move would effectively prevent people from using stablecoins as on-chain savings instruments, restricting their use primarily to payment functions. As a result, stablecoins would shift away from serving as a tool for yield generation and be repositioned largely as payment vehicles.
Markus Thielen, founder of 10x Research, interpreted this development as a “re-centralization of yield.” Thielen argues that, should the draft pass into law, the benefits of stablecoin yields would likely remain limited to traditional banks and regulated market funds. This, he believes, would shrink the competitive space for platforms operating within the crypto ecosystem itself, pushing them further out of the market for yield-based services.
Although the proposal initially appears to disadvantage centralized players most, the analysis points out that DeFi platforms would not escape the reach of these new rules. Thielen contends that while restricting centralized platforms could, in theory, drive users toward DeFi alternatives, such a migration may not be practically feasible under the proposed regime.
Higher risks seen for DeFi protocols
Importantly, the legislative draft indicates that its scope could extend beyond just centralized actors to also encompass interfaces and token models within DeFi. In cases where protocols offer fee-sharing, rewards or other benefits to token holders, these arrangements could fall under the scrutiny of regulators, subjecting them to the same strict requirements as centralized entities.
Highlighted in the 10x Research analysis, leading DeFi platforms such as Uniswap and dYdX, along with lending-focused projects like Aave, may face tighter constraints on value distribution and operations if the measure comes into force. According to the report, this may reduce operational flexibility, bring down transaction volumes, and weaken demand for native tokens tied to these protocols.
On the other hand, the legislative changes could introduce certain advantages for some industry participants. Tighter integration of stablecoins with established payment networks, for instance, may grant a competitive edge to infrastructure providers like Circle, which are already deeply embedded in payment processes.
“From a structural standpoint, this legislation could be supportive for infrastructure firms such as Circle, since it strengthens the position of stablecoins in payment services,” Thielen commented.
Whether the Clarity Act bill will ultimately pass into law remains unclear. However, the ongoing debate about these new regulations signals the potential for lasting changes to business models and value flows across the cryptocurrency sector.
