CLARITY Act Stablecoin Yield Rules Move Forward in Congress

The CLARITY Act has taken a significant step toward becoming law after US Senators Thom Tillis and Angela Alsobrooks released final provisions addressing the long-debated issue of stablecoin yield. The update aims to resolve tensions between the crypto industry and traditional banks over whether yield-bearing stablecoins could undermine banking competitiveness.

Stablecoin Yield Ban and Limited Rewards Framework

The finalized section, titled “Prohibiting interest and yield on payment stablecoins,” bars crypto firms from offering interest or passive returns solely for holding stablecoins. This effectively prevents products that resemble bank deposits. However, the framework allows rewards tied to “bona fide activities,” preserving incentives linked to actual platform usage.

Coinbase chief legal officer Faryar Shirzad said the compromise protects users’ ability to earn rewards while addressing regulatory concerns. Still, some industry voices, including Helius Labs CEO Mert Mumtaz, criticized the decision, arguing it removes access to risk-free yield outside the banking system.

Political Outlook and Industry Reaction

Galaxy Digital’s Alex Thorn expects Senate Banking Committee action soon, possibly within weeks, though he warns banks may intensify opposition. Meanwhile, Coinbase CEO Brian Armstrong urged lawmakers to proceed quickly. Prediction markets currently place the odds of passage in 2026 at around 55%, reflecting cautious but growing optimism.

US Senator Bernie Moreno said that he anticipates the CLARITY Act to “get done” by the end of May. On April 11, US Senator Cynthia Lummis said, “It’s now or never.”