The CLARITY Act would ban passive yield on crypto assets

Crypto holders will no longer be able to earn returns solely for holding assets under the proposed CLARITY Act. Returns are permitted only for active utility, such as payments and platform participation. This distinction is designed to limit competition with traditional bank deposits. JPMorgan Chase indicates that this compromise reduces the risk of regulatory arbitrage against the banking system. The passage of the CLARITY Act would provide a clearer regulatory framework, which reduces legal uncertainty for large-scale investors. This environment facilitates the entry of large-scale investors. Institutional interest in the crypto market increases.