CLARITY Act Stablecoin Yield Deal Clears Path for Senate Markup

Lawmakers Reach Breakthrough on Stablecoin Yield Rules

A long-standing dispute over stablecoin yield provisions has been resolved, potentially advancing the CLARITY Act in the US Senate. Senators Thom Tillis and Angela Alsobrooks finalized compromise language under Section 404, addressing months of disagreement between regulators, banks, and crypto firms.

Section 404 Restricts Interest but Allows Activity-Based Rewards

The new provision bars crypto platforms from offering interest or yield simply for holding stablecoins, aligning them more closely with restrictions on traditional bank deposits. However, it preserves rewards tied to “bona fide” activities such as payments, trading, staking, governance, and loyalty programs. Regulators including the SEC, CFTC, and Treasury are tasked with defining permitted activities within one year.

Coinbase and Industry React to Compromise

Coinbase welcomed the deal, with Chief Policy Officer Faryar Shirzad stating it protects user rewards tied to real platform usage. CEO Brian Armstrong urged lawmakers to proceed, calling for the bill to be marked up.

Additional Rules and Penalties Introduced

The bill also prohibits misleading claims about stablecoins being government-backed or FDIC-insured. Violations could face civil penalties of up to $5 million. Agencies including the Federal Reserve and FDIC will assess long-term impacts on bank deposits and financial stability.

Next Steps for CLARITY Act

The Senate Banking Committee is expected to schedule a markup soon. If approved, the bill must be reconciled with other Senate and House versions before reaching Donald Trump for final approval.