Activity-based rewards are allowed, but anything ‘economically equivalent to interest’ is barred.
Crypto industry leaders reviewed the draft stablecoin yield language in the Digital Asset Market Clarity Act during a closed-door session on Capitol Hill on Monday, and the opening reaction was that the text was overly narrow and unclear, according to CoinDesk.
The draft, negotiated by Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.), bans yield payments for simply holding a stablecoin and restricts any structure that is economically equivalent to a bank deposit, CoinDesk reported. Activity-based rewards tied to loyalty programs, promotions, subscriptions, transactions, and platform use remain permitted, but the mechanics for determining what qualifies as a valid activity remain uncertain.
Circle shares fell 19%, while Coinbase dropped 8% on Tuesday after the draft raised the prospect of strict limits on stablecoin yield.
Coinbase CEO Brian Armstrong, who pulled the company’s support for the Clarity Act in January over yield restrictions, causing the Senate Banking Committee to postpone its markup, has yet to comment on the new text. Stablecoin-related revenue represented roughly 20% of Coinbase’s total revenue in Q3 2025.
The stablecoin yield question had been the single largest obstacle blocking the Clarity Act’s path through the Senate since January. Banks, led by the American Bankers Association, argued that stablecoin rewards could siphon deposits from traditional savings accounts. JPMorgan and Bank of America executives cited a Treasury study indicating that banks could lose up to $6.6 trillion in deposits if stablecoins offered unregulated yields, CNBC reported.
The GENIUS Act, signed into law in July 2025, barred stablecoin issuers from paying interest directly to holders but did not prevent third-party platforms from offering rewards — a gap that experts warned would become a key regulatory battleground.
What’s Next
The deal clears the primary hurdle for a Senate Banking Committee markup, now tentatively targeted for late April after the Easter recess. The bill had already been unlikely to advance before then, as Senate Majority Leader John Thune indicated earlier this month.
From there, the bill faces a full Senate floor vote requiring 60 votes, reconciliation with the Senate Agriculture Committee’s version passed in January, reconciliation with the House version that passed 294-134 in July 2025, and a presidential signature.
Polymarket currently prices the odds of the Clarity Act being signed into law in 2026 at roughly 63%.
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.