Analysis: If Crypto Market Structure Bill Restricts Stablecoin Yields, It Could Lead to Capital Flight from the US

Odaily News Industry insiders warn that if the U.S. Crypto Market Structure Bill (CLARITY Act) imposes restrictions on stablecoin yields, it could drive capital away from regulated U.S. markets towards offshore, less transparent financial structures and "synthetic dollar" products. Colin Butler, Head of Markets at Mega Matrix, stated that prohibiting compliant stablecoins from offering yields to holders does not protect the U.S. financial system. Instead, it marginalizes regulated institutions and accelerates capital migration beyond regulatory boundaries. He noted that the digital yuan already offers interest-bearing functionality, and Singapore, Switzerland, and the UAE are advancing frameworks for interest-bearing digital assets. If the U.S. bans yields on compliant dollar stablecoins, it could weaken its global competitiveness. It is reported that under the already enacted GENIUS Act framework, payment stablecoins like USDC must be fully backed by cash or short-term U.S. Treasury bonds and cannot directly pay interest, being treated as "digital cash." (Cointelegraph)