CLARITY Act Nears Markup as Stablecoin Yield Compromise Finalized

• The CLARITY Act yield compromise was finalized, signaling the bill is near passage.
• Issuers are banned from offering interest-like returns, but activity-based rewards are allowed.
• Banks warn of a 20% impact on lending; lawmakers proceed without changes.

Senator Cynthia Lummis said the latest version of the CLARITY Act is close to completion after months of negotiation. She stated the finalized bipartisan text indicates a compromise on stablecoin yield that both sides can accept.

The update follows a joint statement from Senators Thom Tillis and Angela Alsobrooks confirming that the deal on stablecoin yield rules is now locked. The compromise focuses on limiting risks to bank deposits while allowing crypto firms to continue operating with defined reward structures.

Tillis described the outcome as a consensus-based product shaped through negotiations with multiple stakeholders. He added that the process aimed to prevent delays and move the bill forward.

Yield Ban Targets Deposit Flight Risk

The core provision in the compromise blocks stablecoin issuers from offering rewards that function like interest on bank deposits. Lawmakers termed this as a direct response to concerns from the banking sector about deposit flight.

At the same time, the bill allows activity-based rewards. Crypto platforms can still offer incentives tied to user actions, such as trading or network participation, but not passive yield tied to holding assets.

The language also directs regulators to build a new framework for stablecoins, including disclosure rules and a clear list of permitted reward models.

Banks Push Back as Lawmakers Hold Line

Major banking groups, including the American Bankers Association, said the proposed language does not fully protect deposits. They warned that yield-bearing stablecoins could reduce lending capacity across consumer and business markets, reports revealed.

Industry data cited in the statement shows that yield-based stablecoins could reduce loans across sectors by at least 20%. Banking groups also called for clearer rules and stronger safeguards.

Despite the criticism, lawmakers signaled no further changes to the compromise. Tillis stated that while some banks disagree, the agreement shows a balanced outcome.

Political and Market Momentum Builds

Support for the bill is increasing across both political and industry lines. Senate Banking Committee leadership indicated progress toward a markup in May, with a possible Senate vote in June or July.

Crypto firms have also shifted their stance. Coinbase leadership backed the latest version and called for the immediate advancement of the bill after withdrawing support earlier this year.

Market signals reflect rising confidence. Prediction markets now show a 70% chance of the CLARITY Act becoming law in 2026. 

Related: CLARITY Act Gains Momentum as Tim Scott Eyes May Markup