The long-running battle over stablecoin yield rules in the Digital Asset Market Structure CLARITY Act has finally reached a turning point, with the final text now public and a compromise in place between banks and the crypto industry.
The update, first reported by Punchbowl News, resolves one of the most contentious issues in the bill just weeks before a critical Senate markup expected in mid-May.
Yield Debate Ends With a Split Decision
At the center of the agreement is a clear line: passive yield is out, activity-based rewards stay.
The final text, shaped by Senators Thom Tillis and Angela Alsobrooks, bans rewards that are “economically or functionally equivalent” to deposit interest. In simple terms, stablecoin issuers and platforms can no longer offer passive, bank-like returns just for holding assets.
However, rewards tied to actual usage, such as payments, transfers, or on-chain activity, remain protected. The structure also closes loopholes that could have allowed firms to bypass restrictions through affiliates.
Crypto Industry Claims a Strategic Win
Despite tighter restrictions, major voices in the crypto space framed the outcome as a net positive. Coinbase Chief Policy Officer Faryar Shirzad said the industry managed to protect what truly matters.
“The ability for Americans to earn rewards, based on real usage of crypto platforms and networks,” he said, calling the compromise a step forward for innovation and U.S. competitiveness.
Coinbase’s Chief Legal Officer Paul Grewal echoed that view, arguing that much of the earlier debate was driven by “imagined risks” rather than how crypto systems actually function. He added that preserving activity-based rewards aligns with what even bank lobbyists initially pushed for.
Not Everyone Is Fully Convinced
Still, concerns remain. Ji Kim of the Crypto Council for Innovation warned that the restrictions go “far beyond” earlier proposals like the GENIUS Act, potentially limiting consumer incentives and weakening U.S. leadership in a global market where most crypto activity already happens offshore.
At the same time, policymakers are balancing these concerns with broader systemic risks, particularly fears around deposit flight from traditional banks.
What Comes Next
With the yield issue largely settled, attention now shifts to unresolved areas, including DeFi provisions, ethics rules for officials, and aligning the Senate bill with the House version.
Crypto analyst Adam Minehardt noted that the mid-May markup is now “in full view,” with the key question being whether bipartisan support will hold.
After months of negotiations involving the White House, U.S. Treasury, and Senate leaders, the CLARITY Act is entering its final stretch. For the industry, this moment could define how innovation, regulation, and capital flow into crypto markets in the years ahead.
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