Senators reach CLARITY Act deal; Coinbase backs stablecoin yield ban
Senators Tillis and Alsobrooks finalized a bipartisan CLARITY Act compromise banning passive stablecoin yields that resemble bank interest; Coinbase endorsed the text.
Senators Thom Tillis and Angela Alsobrooks finalized a bipartisan compromise in the Digital Asset Market CLARITY Act that prohibits stablecoin rewards that are economically or functionally equivalent to interest on a bank deposit while allowing rewards tied to genuine platform activity. The agreement clears a path for the Senate Banking Committee to consider the bill.
The text bars payouts offered “in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.” It allows stablecoin balances to be included in reward calculations if they do not amount to passive yield. The measure directs federal regulators to develop a stablecoin disclosure framework and to publish a list of permissible reward activities to guide exchanges and brokers.
Senate Banking is expected to schedule a markup of the bill in the week of May 11. The language emerged after months of debate over whether exchange and broker incentive programs amount to regulated banking activity and over how to distinguish activity-based rewards from passive yield.
Coinbase endorsed the compromise. Paul Grewal, Coinbase’s chief legal officer, wrote that months of meetings produced text that should not derail the broader bill and that public debate had overstated the risks. He added, “This outcome preserves activity-based rewards tied to real participation on crypto platforms and networks.” Faryar Shirzad, Coinbase’s chief policy officer, credited the package with progress on token classification, DeFi safe harbors and tokenization in a separate post.
Market participants reacted to the agreement as a sign the bill could move forward. Prediction markets priced the chance of the CLARITY Act being signed into law this year at roughly 68 percent, after a missed legislative deadline and lobbying by banking interests.
Negotiators continue to work on jurisdictional clarity between the Securities and Exchange Commission and the Commodity Futures Trading Commission, protections for staking, and rules affecting capital formation. Sponsors and industry groups say whether the agreed text survives floor consideration will shape the timeline for final passage before the summer recess.
The regulatory guidance required by the compromise is expected to set detailed standards for how exchanges and brokers design rewards, including acceptable activity types and disclosure requirements. Those standards will determine which reward programs are lawful and which could be treated as deposit-like interest.
