By badbitch on Skatehive
Recent reporting highlights the potential of the new CLARITY ACT draft advancing with yield bans on "passive stablecoin balances." The implication of this has caused Circle's shares to sell-off today, but what impact could this have on DeFi native yields? Passive balances The banking system has primary feared that yield on stablecoins will attract every day savers, potentially causing a significant capital outflow since the idea of earning passive income of higher percentage on the same old dollars the banks are cheap with, would come off as a steal for most people. This fear is reflected on what the reported draft prohibits. And this also gives us some perspective on what broader impact to expect. A ban on yields on passive balances generally means that stablecoins with active roles can earn yield. The question now would be: what qualifies as an active balance? Generally, an active balance includes clearly defined risks in some form. Stablecoins in lending contracts have defined risks