CLARITY Act Should Ban Stablecoin Yields to Advance in Senate, French Hill Says

French Hill, the Chairman of the House Committee on Financial Services, has signaled that the CLARITY Act should ban stablecoin yields to gain bipartisan support and pass in the Senate. This comes as banks and the crypto industry continue to clash over whether third-party crypto firms should distribute stablecoin rewards to users.

French Hill Signals Senate Should Ban Stablecoin Yields In CLARITY Act

In an interview on FOX Business, Hill signaled that the Senate should follow the House’s lead in handling the crypto bill by banning stablecoin yields. This came as he noted that the House passed both the GENIUS Act and CLARITY Act on a bipartisan basis by agreeing that stablecoins should not pay yield.

The congressman said that stablecoins are just a payment device, which consumers use on a blockchain, suggesting that yields should not be the focus as they look to pass this crypto bill. He also noted that the GENIUS Act clearly bans stablecoin yields and provides that bank and non-bank stablecoin issuers should gain the same treatment on sales practices, capital requirements, and supervision.

As such, he opined that the CLARITY Act can resolve the issue of stablecoin yields and put the debate to bed. The congressman’s statement echoes his earlier remarks at the Milken Institute’s Future of Finance event, where he urged the Senate to adopt the House’s version of the crypto bill to make progress.

Hill also recommended that the issue of whether bank and non-bank stablecoin issuers should pay yields should be addressed in the regulatory proposal that the U.S. Treasury has come up with to implement the GENIUS Act. His comment comes as banks and the crypto industry are yet to agree on whether the crypto bill should allow third-party firms to pay stablecoin rewards to users.

The White House has proposed a draft text that limits stablecoin rewards to certain transactions and bans paying rewards on balances. White House crypto advisor Patrick Witt recently slammed banks for the CLARITY Act delay, stating that they were looking to turn the crypto bill into an anti-competition bill.

Expert Says Crypto Bill Unlikely To Pass

In an interview on the Thinking Crypto Podcast, Austin Campbell, founder of Zero Knowledge Consulting, said that the CLARITY Act is unlikely to pass in the Senate. He noted that bills involving political fights between large constituencies, as between banks and crypto in this case, tend not to pass.

He suggested that the Senate is always cautious about picking sides when this happens and prefers to set the bill aside until both parties can reach a compromise. With both sides yet to reach a compromise, a March markup for the bill is now looking less likely.

Notably, Senate Majority Leader John Thune said that the CLARITY Act is unlikely to pass out of the committee before April. Thune and other Republicans are currently seeking to advance the Save America Act, which could also delay the crypto bill’s progress. Meanwhile, Trump has threatened not to sign any bill until the Save Act passes.

With the crypto bill currently facing several roadblocks, crypto traders are reducing their bets on its passage this year. Polymarket data shows that the odds of the CLARITY Act being signed into law this year have dropped to 55%.