SS #85 - Clarity Act Restricts Stablecoin Yield Rewards

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Good morning.

Stablecoin yield just hit a wall on Capitol Hill. The Senate's revised Clarity Act bans rewards on balances and only allows activity-based programs, but nobody can agree on what "activity" actually means. The banking lobby is smiling, crypto insiders are not.

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In Today's Edition:

• Headline: Clarity Act Restricts Stablecoin Yield Rewards

• Quick Bites: Stablecoins Seen Gaining from AI Payments

• Yield of the Week: hyUSD/USDC's 17.39% APY

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HEADLINE

State of play: The Senate's revised Digital Asset Market Clarity Act drew criticism from crypto insiders after a closed-door review revealed narrow, unclear language on stablecoin yield, a key sticking point between the banking and crypto industries.

• Senators Alsobrooks and Tillis introduced a compromise banning yield payments for simply holding stablecoins, only allowing rewards tied to user activities, not balances.

• The language restricts any stablecoin program that resembles interest-bearing bank deposits.

• However, the mechanics for determining allowable activities remain uncertain.

What’s Next: The bill must clear the Senate Banking Committee before lawmakers can prepare a final version for a full Senate vote, following the House passage of a similar version last year.

Why it Matters: Industry leaders see the Clarity Act as the critical second step after the GENIUS Act, believing full regulatory clarity will unlock institutional investment and developer activity in the US market.

Our Take: The banking lobby got what it wanted here. Framing stablecoin yield as acceptable only through "activities" while leaving that term undefined is a recipe for compliance paralysis.

QUICK BITES

• Stablecoins seen gaining from AI payments despite slow uptake.

• Resolv stablecoin crashes 70% as attacker extracts $25M in ETH.

• S. Korea crypto liquidity tumbles as stablecoin balances plunge 55%.

• Delaware to regulate stablecoins under banking framework in new bill.

• Deloitte, Stablecorp plan stablecoin infrastructure for Canadian institutions.

• Circle urges EU to fast-track DLT reforms, widen stablecoin settlement rules.

• Pharmaceutical firm pivots to stablecoins, holds nearly 9% of SKY's supply.

YIELD OF THE WEEK

hyUSD/USDC Liquidity Pool (Orca): 17.39% APY

• The pool accepts hyUSD and USDC deposits in a 41.4%/58.6% ratio, providing concentrated liquidity at a 0.01% fee tier on a stable pair priced at ~1.0016 USDC per hyUSD. Total deposits currently stand at ~$1.52M.

• Capital is deployed into a tight concentrated liquidity range around the hyUSD/USDC peg, with adaptive fees enabled to dynamically adjust earnings based on market conditions.

• Yield is generated from trading fees on ~$1.46M in 24H volume, with the 0.01% fee tier producing an estimated 17.39% APY on a full-range position over 365 days.

PT apyUSD (apxUSD) via Pendle: 13.88% APY

• The market accepts apxUSD deposits and provides fixed-yield exposure to apyUSD, a yield-bearing stablecoin backed by DAT preferred share dividends, maturing June 18, 2026, while earning 13x APYX Pips points.

• Capital is deployed into Apyx's vault with no leverage or rehypothecation, where 1 apyUSD converts to 1.34699 apxUSD at maturity via continuous exchange rate appreciation.

• Yield is generated from DAT preferred share dividends converted and streamed on-chain into the vault, with the PT locking in a fixed 13.88% APY while YT holders capture remaining variable yield and points.

Reservoir wsrUSD Looping Vault: 13.60% APY

• The vault accepts rUSD deposits and provides leveraged exposure to srUSD, Reservoir's yield-bearing stablecoin backed by a multi-collateral balance sheet of digital strategies and RWAs.

• Total deposits currently stand at ~$4.14M rUSD with $1.86M capacity remaining.

• Capital is deployed via leveraged looping at 10.86x effective leverage, primarily through Morpho wsrUSD/USDC markets, with $44.9M in total assets against $40.8M in liabilities across multiple Morpho lending markets.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.