Key Takeaways
- Compromise language for the CLARITY Act prohibits stablecoin providers from distributing yields based purely on passive holdings
- Activity-driven rewards linked to genuine platform engagement remain permissible under the agreement
- Bipartisan Senators Thom Tillis and Angela Alsobrooks reached the final agreement following extensive negotiations
- Coinbase praised the outcome, with CEO Brian Armstrong urging lawmakers to “Mark it up”
- Prediction markets on Polymarket now show 55% odds of passage in 2026, climbing 9 percentage points within a day
A persistent disagreement between traditional financial institutions and cryptocurrency companies regarding stablecoin yields has reached resolution, removing a significant obstacle for the Digital Asset Market Clarity Act.
On Friday, Senators Thom Tillis and Angela Alsobrooks unveiled revised legislative language. The updated text prohibits digital asset companies from distributing interest or yield payments to users merely for maintaining stablecoin balances.
Traditional banks expressed concerns that yield-generating stablecoin products could function similarly to deposit accounts, diverting capital from conventional lenders and constraining their lending capacity.
The negotiated agreement prevents crypto platforms from offering returns that are “economically or functionally equivalent” to interest earned on traditional bank deposits.
Nevertheless, the compromise permits incentives connected to what legislators term “bona fide activities.” This provision enables users to receive rewards through active engagement with cryptocurrency platforms and blockchain networks, rather than through simple token custody.
[[LINK_START_0]]Coinbase[[LINK_END_0]] participated extensively in the bargaining process and faced substantial implications from the outcome. Chief Policy Officer Faryar Shirzad acknowledged that financial institutions secured tighter limitations than crypto advocates preferred, though the fundamental capacity to provide activity-linked incentives was maintained.CEO Brian Armstrong responded succinctly on X: “Mark it up.” Chief Legal Officer Paul Grewal noted that the framework “preserves activity-based rewards tied to real participation on crypto platforms and networks.”
Operational Shifts for Cryptocurrency Companies
According to an industry insider, digital asset firms will need to transition from a “buy and hold” approach to a “buy and use” strategy to meet the requirements for reward programs under the new framework.
The legislation mandates that the Treasury Department and the Commodity Futures Trading Commission initiate a rulemaking procedure within twelve months of enactment. This regulatory process will establish clearer definitions of qualifying activities for reward eligibility.
Regulatory agencies will have authority to evaluate factors including account balance, time duration, and activity type when crafting those guidelines. The text also incorporates anti-circumvention provisions.
Legislative Calendar and Senate Proceedings
Galaxy Digital research director Alex Thorn indicated that publication of the compromise text signals the Senate Banking Committee may schedule a markup session “as soon as the week of May 11.”
Thorn also cautioned that traditional banking interests are anticipated to intensify lobbying efforts against the measure now that final language has been disclosed.
Senator Bernie Moreno recently projected the legislation would be finalized by late May. Senator Cynthia Lummis declared on April 11, “It’s now or never.”
The Clarity Act experienced delays earlier this year when a scheduled January markup was abruptly canceled.
Polymarket prediction markets currently assign the CLARITY Act a 55% probability of presidential signature in 2026.
President Donald Trump has prioritized cryptocurrency regulatory reform during his second administration. Digital asset businesses have historically navigated an ambiguous regulatory landscape, which industry leaders contend has restricted expansion opportunities.
