Crypto’s CLARITY Act: DeFi Tokens at Risk as Yield Moves to Traditional Finance

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Crypto’s CLARITY Act could be a headwind for DeFi tokens ring-fencing yield, analyst saysMarkets

What to know:

  • The CLARITY Act would ban yield on stablecoins, redefining them as payment tools, not savings products.
  • The proposal, if passed, could re-centralize yield into traditional finance and regulated products, creating a headwind for decentralized finance (DeFi), 10x Research’s Markus Thielen argued.
  • The shift would favor Circle (CRCL) and regulated infrastructure, while weighing on DeFi tokens, Thielen said.

The proposed Clarity Act, a new crypto bill, is drawing attention primarily due to its regulations on stablecoins. A recent report from 10x Research suggests these rules could significantly impact decentralized finance (DeFi) and the tokens associated with it.

My research focuses on a proposal that would prohibit offering any kind of return – like rewards or yield – on stablecoin holdings. Essentially, this would shift the purpose of stablecoins away from being a place to earn interest and towards simply being a way to make payments. It would redefine them as payment systems, rather than savings products.

According to Markus Thielen, founder of 10xResearch, this shift concentrates returns back into traditional financial institutions like banks and money market funds. This means crypto platforms will have a harder time offering competitive returns to users.

That shift could also hit DeFi, despite early hopes it might benefit.

Thielen explained the thinking was that if platforms like exchanges or lenders couldn’t provide returns, users would likely shift their activity directly to blockchain networks.

However, that relies on the idea that decentralized finance, or DeFi, won’t be subject to the same regulations. In reality, the Clarity framework will probably expand to include the user interfaces and how tokens are created, particularly when fees or how decisions are made start to function like traditional ownership shares, according to one expert.

This brings a large part of the cryptocurrency sector under scrutiny. The report suggests that decentralized exchanges like Uniswap and dYdX, and lending platforms like Aave, might face stricter rules regarding their operations and how they reward users. This could lead to less trading activity, reduced availability of assets, and lower demand for their tokens.

According to Thielen, the new regulation is actually good news for infrastructure companies like Circle (CRCL) because it will integrate stablecoins more fully into the payment system.

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2026-03-29 19:06