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Stablecoin Yield Compromise
U.S. Senate negotiators have reached a compromise on stablecoin yield language in the Digital Asset Market Structure CLARITY Act, clearing a major obstacle that had stalled progress on the broader bill.
“barring rewards that are economically or functionally equivalent to interest on a bank deposit”
Forbes reports that Senate negotiators agreed to new stablecoin yield language in the CLARITY Act, with the text barring rewards that are “economically or functionally equivalent to interest on a bank deposit.”
The compromise was finalized by Sens. Thom Tillis and Angela Alsobrooks, and Forbes says it addresses a key gap in the GENIUS Act raised by the banking industry.
Forbes adds that the GENIUS Act, which President Donald Trump signed into law on July 18, 2025, established a federal framework for payment stablecoin issuers, including reserve requirements, redemption obligations and anti-money laundering provisions, while prohibiting interest payments by stablecoin issuers without explicitly addressing certain secondary market practices.
InteractiveCrypto similarly frames the development as the crypto industry backing the CLARITY Act yield compromise and pushing the Senate Banking Committee for a markup.
Analytics Insight reports that the agreement blocks crypto firms from offering passive stablecoin yield that resembles bank deposit interest, while allowing rewards tied to real platform use, including payments, transfers, and network activity.
FinanceFeeds adds that Section 404 of the bill prohibits digital asset service providers from offering any form of interest or yield to U.S. customers that is “economically or functionally equivalent” to a bank deposit, and says the restriction targets programs that resemble traditional savings products.
What Rewards Stay Allowed
The compromise does not eliminate all stablecoin rewards; it instead draws a line between deposit-like yield and incentives tied to activity.
Analytics Insight says the agreement “allows rewards tied to real platform use, including payments, transfers, and network activity,” and it describes the restriction as barring rewards that are “economically or functionally equivalent” to interest on a bank deposit.
FinanceFeeds similarly says the compromise preserves “activity-based or transaction-based rewards” tied to legitimate platform usage, and it lists examples including incentives linked to payments, transfers, trading activity, staking, governance participation, and loyalty programs.
Forbes reports that the new language applies to rewards paid by covered parties and prohibits payments that function as deposit interest or yield, while preserving room for rewards tied to bona fide platform activity “provided they do not meet the equivalence standard.”
It also says the text directs regulators to develop a framework for disclosures and a catalog of permissible reward activities.
FinanceFeeds adds that regulators including the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Treasury Department are tasked with defining permitted activities within one year, and it describes the framework as allowing rewards to be calculated based on user balances, holding duration, or tenure so long as they are tied to qualifying activity rather than passive holding.
Traders Union adds that the proposal allows some transaction-based rewards programs but would force firms to redesign offerings that resemble interest on deposits, and it notes that the language mandates Treasury and CFTC to draft implementing rules within a year of enactment.
Industry and Banking Reactions
The stablecoin yield compromise immediately drew public responses from industry figures and framed the dispute as a balance between restrictions sought by banks and rewards sought by crypto platforms.
“We commend Senators Tillis and Alsobrooks for their leadership in reaching this agreement. Resolving the stablecoin yield question clears the path to a Senate Banking Committee markup”
Forbes quotes Blockchain Association CEO Summer Mersinger praising the agreement, saying, “We commend Senators Tillis and Alsobrooks for their leadership in reaching this agreement. Resolving the stablecoin yield question clears the path to a Senate Banking Committee markup and brings us meaningfully closer to comprehensive market structure legislation becoming law.”
Forbes also quotes Coinbase Chief Policy Officer Faryar Shirzad describing the outcome as preserving Americans’ ability to earn rewards based on real usage, and Analytics Insight includes Shirzad’s phrasing that “the ability for Americans to earn rewards, based on real usage of crypto platforms and networks.”
FinanceFeeds adds that Coinbase CEO Brian Armstrong responded to the agreement by urging lawmakers to move forward, writing: “Mark it up.”
On the banking side, Analytics Insight says banks pushed for the limit because they feared stablecoin reward products could draw deposits away from traditional lenders, and it describes the concern that bank-like returns from crypto firms could make it harder for lenders to fund loans.
FinanceFeeds similarly says the restriction aligns stablecoins more closely with payment instruments rather than yield-bearing accounts and frames it as targeting programs that resemble traditional savings products.
Yellow reports that Coinbase CEO Brian Armstrong had rejected the CLARITY Act twice earlier this year, but later endorsed it after an op-ed by Treasury Secretary Scott Bessent, and it states that Armstrong’s reversal came after “a compromise negotiated by Senators Thom Tillis and Angela Alsobrooks on the wording regarding stablecoin yields.”
Divergent Coverage and Emphasis
While multiple outlets agree on the existence of a stablecoin yield compromise, they emphasize different aspects of what the deal changes and what remains unresolved, producing a noticeable divergence in how the story is framed.
Forbes focuses on the legislative mechanics and the gap between the GENIUS Act and the CLARITY Act, describing how the GENIUS Act prohibited interest payments by stablecoin issuers but “did not explicitly address certain secondary market practices by exchanges or affiliates,” and it says the compromise removes a major roadblock that had stalled progress on the broader CLARITY Act.
Analytics Insight, by contrast, emphasizes the functional effect on reward products, stating that the agreement “blocks crypto firms from offering passive stablecoin yield” while allowing rewards tied to “real platform use, including payments, transfers, and network activity,” and it highlights that regulators including the Treasury Department and the Commodity Futures Trading Commission would lead rulemaking.
FinanceFeeds adds additional compliance framing, including that platforms cannot market stablecoins as investment products or claim they are backed by the US government or insured by the FDIC, and it says violations could result in civil penalties of up to $5 million per breach.
Traders Union frames the compromise as narrowing one of the biggest obstacles and says major industry groups including Blockchain Association, Crypto Council for Innovation, and Coinbase support the compromise, while also noting policy concerns about the prohibition’s breadth beyond the approach taken in last year’s GENIUS Act.
Phemex provides a timeline and a “calendrier” style narrative, reporting that the obstacle had blocked the Senate Banking Commission examination in January and that the senators’ teams said negotiations were “résolues à 99 %,” while also describing other open issues such as DeFi provisions, ethics questions, and community bank deregulation.
Yellow centers on Coinbase’s shifting stance, stating that Armstrong changed his stance and publicly endorsed the CLARITY Act after rejecting it twice earlier in the year, and it ties the reversal to a Treasury Secretary Scott Bessent op-ed and to the stablecoin yield compromise.
Next Steps and Stakes
The compromise is presented as clearing the way for Senate Banking Committee action, but multiple outlets describe a still-tight path with other unresolved issues and a calendar that could affect whether the bill advances before midterm elections.
“now targeted for May”
Forbes says the agreement removes a major roadblock that had stalled progress on the broader CLARITY Act and that Senate Banking Committee Chairman Tim Scott has indicated the bill will require unified Republican support before advancing to a markup, which is now targeted for May.
Analytics Insight similarly says the stablecoin deal removes a key obstacle for the CLARITY Act, but that the broader bill still faces talks over DeFi provisions, tokenization, software developer safeguards, and ethics rules for officials, and it states that the next step depends on committee support in May.
FinanceFeeds adds that the agreement clears the way for a Senate Banking Committee markup, which had been delayed multiple times due to disagreements over the yield language, and it says the bill will still need to be reconciled with a separate version passed by the Senate Agriculture Committee before moving to a full Senate vote.
Bitfinanzas provides a legislative calendar, stating that the Clarity Act was approved by the House on July 17, 2025 with 294 votes in favor and 134 in against, and it says the markup in the Senate Banking Committee is expected in May 2026 after a proposal by Senator Thom Tillis to postpone the markup until May.
It also says that, according to Coindesk, the law needs approval in committee in May and vote in the full chamber before July 2026 to survive the legislative calendar, and it cites Galaxy Digital analysts estimating a 50-50 probability of promulgation before the midterms of November 2026.
Yellow adds that the CLARITY Act has already been blocked twice in the Senate since January, and it says lawmakers returning from recess on April 13 means the banking committee review could occur as early as the end of April, the last realistic window before midterm campaigns monopolize the legislative calendar.
