TLDR
The CLARITY Act is stuck in the US Senate because banks and crypto firms are fighting over whether stablecoins can pay yield to holders.
- The bill passed the House but is stalled in Senate Banking Committee as the American Bankers Association pushes to eliminate stablecoin yield, while crypto groups resist this ban.
- Lawmakers are debating compromises that would ban passive savings account style stablecoin interest but possibly allow activity-based rewards, with Coinbase withdrawing support over these restrictions.
- If the yield fight is not resolved by late April, analysts say the bill could slip to 2027 or later, keeping US crypto market structure and stablecoin rules uncertain.
Deep Dive
1. What The CLARITY Act Does And Where It Stands
The Digital Asset Market Structure Clarity Act (CLARITY Act) aims to define how US regulators split oversight of digital assets between the SEC and CFTC and set core rules for exchanges and stablecoins. It passed the House in July 2025 with a strong bipartisan vote of 294134 but has since stalled in the Senate Banking Committee.
Reporting notes that Senate leaders have prioritized other legislation, and prediction markets plus analysts warn that if the bill does not clear committee and reach the Senate floor by roughly early May 2026, passage this year becomes extremely low.
Without movement in the next few weeks, serious US crypto market-structure reform is likely pushed into the next Congress.
2. How Stablecoin Yield Became The Logjam
Although many crypto users are focused on privacy and self-custody, the main obstacle in Congress is stablecoin yield. Banking lobbies are pressing to eliminate all interest-bearing stablecoin products, arguing they threaten traditional deposits and banking models.
Articles describe the American Bankers Association lobbying to strip yield, while senators work on a compromise that would ban passive, savings-style yields but still allow activity-based rewards such as cashbacks or usage incentives for payments. Coinbase publicly pulled its support, saying a ban on yield and limits on DeFi and tokenized real-world assets would make the bill worse than the status quo.
The fight is not about whether stablecoins exist, but whether they can directly compete with bank accounts on yield.
3. Implications For Crypto Users And Stablecoin Markets
For US users and issuers, the near-term risk is continued uncertainty. If CLARITY fails this window, the US will likely remain a patchwork of agency actions instead of having one coherent market-structure law.
For stablecoins, a strict yield ban would push interest-bearing products into offshore venues and DeFi protocols, reducing the ability to offer simple dollar plus yield products under US law while potentially driving more activity to jurisdictions that explicitly allow them. At the same time, the bill does contain positives, like clearer SEC/CFTC boundaries and explicit protection for self-custody and peer-to-peer transfers.
Until lawmakers either agree on a narrower yield restriction or abandon the ban, expect slow progress on US-compliant interest-bearing stablecoins and continued regulatory arbitrage toward friendlier jurisdictions.
Conclusion
The CLARITY Act has become a proxy battle between banks defending deposit franchises and crypto firms pushing to let stablecoins pay yield. Unless they find a compromise soon, the bills delay will keep US rules fragmented and encourage stablecoin innovation and yield products to grow abroad or in DeFi, while institutional US adoption waits for clearer and more balanced legislation.
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