Tillis and Alsobrooks Finalize CLARITY Act Stablecoin Yield Rules After Coinbase Push

A newly published stablecoin-yield section inside the CLARITY Act is designed to let crypto firms keep offering certain rewards while blocking returns that look like bank deposit interest.

CoinDesk describes the text released Friday as one that “blocks crypto firms from offering stablecoin yield offerings that look like bank deposits,” while allowing “bona fide” transactions.

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The same CoinDesk reporting says the compromise was worked out between members of the Senate Banking Committee, and it names Senators Thom Tillis and Angela Alsobrooks as the key negotiators.

The restriction is framed in legal language as a prohibition on paying “any form of interest on yield (whether in cash, tokens, or other consideration)” to a restricted recipient in connection with holding payment stablecoins.

CoinDesk adds that the restriction does not apply to incentives “based on bona fide activities or bona fide transactions” that differ from yield generated by interest-bearing bank deposits.

Cryptonews.net similarly characterizes the deal as limiting “passive yield on idle stablecoin balances” while permitting rewards tied to “real platform activity.”

TradingView and Cointelegraph both quote Coinbase’s Faryar Shirzad urging that “It’s time to get CLARITY done,” after Tillis and Alsobrooks published the final text aimed at settling the stablecoin yield dispute.

The compromise’s core line is that rewards cannot be paid in a way that is “economically or functionally equivalent” to interest on an interest-bearing bank deposit.

CoinDesk reports that the text “prohibits crypto firms from offering yield on stablecoin deposits if that yield is the functional or economic equivalent to banks' offerings,” and it says the new section “would ban stablecoin issuers from offering yield based on just holding stablecoin reserves.”

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Forbes, citing Punchbowl News reporting, similarly says the compromise “barring rewards that are economically or functionally equivalent to interest on a bank deposit.”

Cryptonews.net adds that the compromise “limits passive yield on idle stablecoins but still allows rewards tied to real platform activity.”

CoinDesk further quotes the legalese: “No covered party shall, directly or indirectly, pay any form of interest on yield (whether in cash, tokens, or other consideration) to a restricted recipient — (A) solely in connection with the holding of such restricted recipient's payment stablecoins; or (B) on a payment stablecoin balance in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.”

TradingView and Cointelegraph both point to the document titled “SEC 404. Prohibiting interest and yield on payment stablecoins,” describing that “no crypto firm may pay “any form of interest or yield” to customers solely for holding stablecoins, akin to a bank deposit or any similar interest-bearing product.”

CoinDesk also notes that the restriction does apply to loyalty programs or similar efforts, which it contrasts with activity-based rewards.

While the text blocks bank-like yield on holding stablecoins, it preserves rewards tied to participation and transactions that are treated as “bona fide.”

“Clarity Act text lets crypto firms offer stablecoin rewards while shielding bank yield The text released Friday blocks crypto firms from offering stablecoin yield offerings that look like bank deposits, but "bona fide" transactions are allowed”

CoinDesk

CoinDesk says the restriction “does not apply to incentives ‘based on bona fide activities or bona fide transactions’ that are different from yield generated by interest-bearing bank deposits,” and it compares the approach to rewards that resemble credit card activity.

Cryptonews.net describes the same structure as allowing “activity-based rewards based on payments, transfers, and platform usage,” and it frames the compromise as removing an obstacle that had delayed the CLARITY Act.

CoinDesk also reports that the text includes an “equivalence test” concept, where rewards must not be economically or functionally equivalent to deposit interest, and Cryptonews.net says the banks had sought a full ban while crypto argued for consumer incentives.

Coinbase’s Paul Grewal is quoted by CoinDesk saying the language “preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said they wanted,” and he adds that “we’re focused on getting a bill done and are satisifed that this language should not be the basis of any objection.”

Cryptonews.net quotes Coinbase chief policy officer Faryar Shirzad saying, “In the end, the banks were able to get more restrictions on rewards, but we protected what matters – the ability for Americans to earn rewards, based on real usage of crypto platforms and networks.”

CoinDesk further says the rulemaking provisions direct the Treasury Department and the Commodity Futures Trading Commission to launch a rulemaking within a year of the bill becoming law, which it says could define how and when crypto firms can offer yield.

The stablecoin-yield compromise is presented across outlets as the product of months of negotiations and as a step that could unlock further Senate movement on the CLARITY Act.

CoinDesk says the text comes after “months of negotiations between the crypto and banking industries,” facilitated by the White House and Senators Thom Tillis and Angela Alsobrooks.

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It also says a Senate Banking Committee markup on the overall Clarity Act was postponed last-minute in January, and that “Coming to an agreement means there's likely nothing in the way of a Senate Banking Committee hearing (known as a markup).”

Forbes similarly reports that the agreement “removes a major roadblock that had stalled progress on the broader CLARITY Act,” and it says the markup in May “becomes possible.”

TradingView and Cointelegraph both connect the release of the text to near-term Senate scheduling, with Cointelegraph quoting Galaxy Digital head of firmwide research Alex Thorn saying the “release of text suggests that Senate Banking will schedule markup imminently, as soon as the week of May 11.”

Cryptonews.net adds that the bill could move forward “as early as May,” and it frames the revived momentum as coming after the stablecoin yield standoff broke.

CoinDesk quotes Coinbase CEO Brian Armstrong writing “Mark it up,” and it also quotes Paul Grewal saying the language “preserves activity-based rewards.”

Reactions to the compromise split between those who see it as preserving innovation and those who warn it could still constrain incentives.

“Extract of the “SEC 404”

Cointelegraph

CoinDesk quotes Paul Grewal saying the language “preserves activity-based rewards tied to real participation on crypto platforms and networks,” and it adds that Coinbase CEO Brian Armstrong wrote “Mark it up.”

Cointelegraph

Cryptonews.net quotes Faryar Shirzad saying “In the end, the banks were able to get more restrictions on rewards,” while still claiming “we protected what matters – the ability for Americans to earn rewards, based on real usage of crypto platforms and networks.”

At the same time, CoinDesk includes a Consumer Federation of America perspective from Corey Frayer, who says the rulemaking wording “could allow crypto firms to conduct the activities and then pay the returns back to customers,” and it notes regulators could consider “balance, duration and tenure” in rewards calculations.

TradingView includes Helius Labs CEO Mert Mumtaz voicing frustration, saying, “The clarity of not getting risk-free yield on your dollars without using a bank.”

Forbes adds that other provisions remain unresolved, including those related to “tokenization, decentralized finance protections and software-developer safeguards,” and it quotes Blockchain Association CEO Summer Mersinger saying the agreement “clears the path to a Senate Banking Committee markup.”

Across the reporting, the next steps repeatedly return to Senate scheduling and the rulemaking process, with CoinDesk saying the Treasury Department and the Commodity Futures Trading Commission must launch rulemaking within a year of the bill becoming law.