Will your crypto rewards survive upcoming CLARITY law? A plain-English guide to Section 404

The Digital Asset Market Clarity Act, better known as the CLARITY Act, was supposed to draw clean lines around crypto assets and which regulator gets the first call. CryptoSlate has already walked readers through the bill’s larger architecture ahead of the January markup, including what changed, what stayed unresolved, and why jurisdiction and state preemption may matter as much as the headline definitions. The part consuming the most oxygen right now is narrower and much more nuanced: it's about who can pay consumers to keep dollars parked in a particular place. Related Reading Washington’s new crypto bill would strip states of power – legally bans oversight that catches front-end manipulation Crypto’s biggest U.S. problem has always been jurisdiction. The CLARITY Act aims to end the SEC–CFTC tug-of-war, while opening a new fight over DeFi and state preemption. Jan 4, 2026 · Andjela Radmilac That dispute became harder to ignore after Coinbase said it couldn't support the Senate draft in its current form, and the Senate Banking Committee postponed a planned markup. Since then, the bill has shifted into the phase where staff rewrite verbs, and lawmakers test whether a new coalition is real. Senate Democrats said they would keep talking with industry representatives about concerns, while the Senate Agriculture Committee pointed to a parallel schedule, including their Jan. 21 draft and a hearing scheduled for Jan. 27. If you want the simplest way to understand why stablecoin rewards became the tripwire, forget the slogans and picture one screen: a user sees a dollar balance labeled USDC or another stablecoin and an offer to earn something for keeping it there. In Washington, that “something” is interest. In banking, “there” is a substitute for deposits. In the Senate draft, the conflict is concentrated in Section 404, titled “Preserving rewards for stablecoin holders,” a section that essentially tells platforms what they can and cannot do. The line Congress is tryin...