Senate Compromise on Stablecoin Yield Revives CLARITY Act

Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) announced a bipartisan amendment to the CLARITY Act that bars crypto firms from offering rewards on stablecoin balances that are “economically or functionally equivalent” to interest on a bank deposit. The language distinguishes passive yield from activity-based incentives, allowing rewards tied to user actions while prohibiting interest-like payments. The amendment restores momentum for a Senate markup slated for May and aligns with Treasury and CFTC plans to issue rulemaking that will define “equivalent” rewards.

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• Senators Tillis & Alsobrooks – framed the compromise as a “bipartisan path” to regulatory certainty for crypto innovation.

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• Bank trade groups – the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America issued a joint statement that the language “falls short” of its goal.

Negotiators brush off bank concerns with stablecoin-yield compromise

• Crypto industry – Coinbase CEO Brian Armstrong urged a swift markup; a crypto-focused super-PAC has amassed nearly $200 million for the 2026 election cycle.

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• Regulators – the OCC’s Genius Act proposal would bar yield on custodial stablecoins but permits third-party arrangements; Treasury and the CFTC will issue complementary rules.

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• Crypto-focused super-PAC spent > $100 million in 2024 and entered 2026 with ? $200 million.

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• The Financial Services Forum’s dark-money nonprofit is funded with about $100 million.

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• Crypto-related equities rallied after the deal: Crypto News Circle +19.89 %, Coinbase +6.14 %, Bitgo +10.26 %; BTC traded above $80,000.

Crypto Stocks Rise as CLARITY Act Stablecoin Yield Dispute Nears Resolution

• Bank groups cite research that yield-earning stablecoins could cut consumer, small-business and farm loans by 20 % or more; the Independent Community Bankers of America warned community-bank lending could fall by $850 billion.

Negotiators brush off bank concerns with stablecoin-yield compromise

Senators Tillis and Alsobrooks released a joint statement emphasizing that the amendment “prohibits stablecoin rewards from resembling interest on bank deposits while still permitting other customer rewards” and that it “helps put us on a bipartisan path to pass the CLARITY Act.” The coalition of bank trade groups responded that the compromise “does not go far enough” and warned it may leave loopholes for membership-program rewards. Coinbase publicly called for the Senate Banking Committee to “mark it up” without delay.

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Bank trade groups argue the amendment permits “membership-program” rewards that could effectively replicate interest, and they object to language allowing rewards based on the duration of stablecoin holdings. They contend such loopholes could trigger deposit flight, especially from rural and community banks, and undermine loan availability. The ICBA’s $850 billion loss estimate underscores the sector’s fiscal concerns.

How the CLARITY Act Reshapes Stablecoin Rewards

Estimates of loan impact vary: one study projects a 20 % reduction in certain loan categories, while the ICBA projects an $850 billion decline in community-bank lending. It also remains unclear whether the OCC’s Genius Act rule will be interpreted to close third-party workarounds, and the Senate’s final vote on the amendment is still pending.

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The compromise balances two competing policy goals: preventing crypto platforms from siphoning deposits away from traditional banks and providing regulatory clarity that could unlock broader crypto-finance integration. Market reactions suggest investors view the amendment as a step toward mainstream adoption, while banks fear erosion of their deposit base and credit-extension capacity.

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The Senate Banking Committee is expected to hold a markup in May. Treasury and the CFTC will publish rules defining “equivalent” rewards. The OCC has received extension requests for its comment period, and the final CLARITY Act vote will hinge on whether lawmakers can reconcile the remaining bank-crypto divide.

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• “Just feeling like we’re constantly pushing uphill to defend what should be absolutely sacrosanct in Congress, which is economic development, economic vitality of communities.” — Christopher Williston, CEO, Independent Bankers Association of Texas

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• “It’s hard to gauge and hard to discuss metrics when you’re talking about pissed off-ed-ness,” — Sen. John Kennedy (R-LA)

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• “It’s probably going to pass Banking as a partisan bill and then we’ll solve whatever last-minute concerns the Democrats have,” — Sen. Bernie Moreno (R-OH)

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• “I have been skeptical of the deposit-flight concern, or that consumers might replace checking accounts with stablecoins.” — James Wester, Director of Cryptocurrency, Javelin Strategy & Research

How the CLARITY Act Reshapes Stablecoin Rewards

• “Most importantly, it helps put us on a bipartisan path to pass the CLARITY Act, providing the regulatory certainty needed to foster innovation,” — Thom Tillis & Angela Alsobrooks

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