TLDR
US lawmakers are preparing to mark up the CLARITY Act after a bipartisan deal on how stablecoin rewards can work.
- The compromise bans passive interest-like yield on stablecoin balances but allows activity-based rewards, unlocking a Senate Banking Committee markup as soon as mid May.
- Stablecoin issuers and crypto platforms would lose traditional savings account yields, but can still offer rewards for real usage, while gaining broader market-structure clarity.
- The bill still faces committee votes, floor time, bank lobbying, and unresolved DeFi and ethics issues, so passage in 2026 is possible but not guaranteed.
Deep Dive
1. Stablecoin Deal And Markup
Senators Thom Tillis and Angela Alsobrooks have released compromise language on stablecoin rewards within the Digital Asset Market Clarity Act, clearing the main obstacle that had stalled the bill for months. The draft bans rewards that are economically or functionally equivalent to interest on bank deposits, while directing regulators to define which usage-based rewards remain allowed, such as payments or platform activity. With that dispute resolved, the Senate Banking Committee is now expected to hold a markup as early as the week of 11 May, making it a critical test window for the bills prospects in 2026. This sequence is detailed in recent coverage of the compromise language on stablecoin rewards.
2. How It Changes Stablecoins And Platforms
Section 404 of the CLARITY Act would bar digital asset firms from paying yield simply for holding stablecoins, and would also ban reward structures that closely mimic bank deposit interest, closing a loophole in earlier law such as the GENIUS Act. At the same time, it explicitly preserves rewards tied to genuine activity, like trading, transactions, or staking, rather than a total ban on incentives, as outlined in analyses of Section 404 of the CLARITY Act. Banking trade groups argue this still risks deposit flight and want tighter limits, while major crypto firms including Coinbase and Circle now back the compromise, seeing it as an acceptable price for regulatory clarity on stablecoins and broader market structure.
Stablecoins likely remain usable with points-style or usage rewards, but simple earn interest on idle USDC/USDT products would be heavily constrained if this language becomes law.
3. Remaining Hurdles And What To Watch
Even with the stablecoin dispute settled, the CLARITY Act still must clear several steps: Senate Banking markup, a committee vote, a 60 vote Senate floor threshold, reconciliation with Agriculture and House versions, and presidential approval. Reports highlight unresolved fights over DeFi developer protections, AML and illicit finance language, and an ethics clause that staffers describe as a live grenade, plus bank lobbying to tighten yield rules further. A mid May markup is seen as the practical deadline; if it slips, election politics could delay comprehensive crypto legislation for years, as noted in coverage of potential delays tied to other Congressional priorities.
For crypto users and builders, the key signals now are whether the markup is scheduled on time, whether the stablecoin language stays intact, and how DeFi and developer provisions are ultimately drawn.
Conclusion
The CLARITY Acts stablecoin compromise trades away bank-like yield on idle balances in exchange for preserving activity-based rewards and unlocking progress on a broader crypto rulebook. If the bill advances on the current timeline, it could significantly reduce US regulatory uncertainty around stablecoins, exchanges, and token classification, but slippage or last minute changes on DeFi, ethics, or yield could still reshape the outcome.
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