CLARITY Act nears deal on stablecoin yields

TLDR

US lawmakers are closing in on a compromise over how stablecoin yields will be treated in the CLARITY Act, but the final terms are not public yet.

1. Coinbases legal chief says negotiators are very close to a deal on the CLARITY Acts stablecoin yield rules, with a Senate markup expected once that dispute is resolved.
2. The fight centers on whether issuers and platforms can pay interest like rewards on stablecoin balances, with banks pushing for tight limits and crypto firms warning against a broad ban.
3. Key signals to watch are the release of compromise text, a Senate Banking Committee markup date, and how closely CLARITYs yield rules align with the already passed GENIUS stablecoin law.

Deep Dive

1. Where Negotiations Stand

The Digital Asset Market Clarity Act (CLARITY Act) is a comprehensive US crypto market structure bill that already passed the House in July 2025 but has been stuck in the Senate.

Coinbase Chief Legal Officer Paul Grewal said in a Fox Business appearance that a deal on the bills stablecoin rewards provision could be reached within 48 hours, likely by Friday, and that a Senate markup could follow this month, potentially leading to a floor vote later on, according to a detailed recap from Coingape and others who quoted him directly in a recent report.

However, Senate staff have indicated that updated bill text will not be released immediately, partly to avoid giving opponents time to organize against it, so there is still uncertainty about the exact compromise language.

2. Why Stablecoin Yield Is So Controversial

The core dispute is whether stablecoin issuers or platforms can offer yield or rewards on customer stablecoin balances.

Reporting on the latest draft indicates it would broadly ban platforms from offering yield or economically or functionally equivalent interest products on stablecoins, affecting exchanges and brokers as well as issuers, to address banking industry concerns, according to a Bitcoinist summary of the draft.

Banks argue that high yielding stablecoins could drain deposits and destabilize the banking system, while firms like Coinbase counter that there is no evidence of meaningful deposit flight and that blanket bans would simply push stablecoin yield products offshore.

This fight sits on top of the GENIUS Act, already law, which set strict 1:1 reserve rules for stablecoins and banned issuers from rehypothecating reserves but left open questions around third party yield and rewards, as highlighted in a recent Treasury NPRM overview.

3. What To Watch Over The Next Weeks

Three concrete milestones matter now:

1. Compromise text: When the negotiated yield language is published, look for whether it is a near total ban, a narrow set of exceptions, or a fully regulated yield regime.
2. Senate Banking markup date: A scheduled markup would confirm that leadership believes they have the votes to move CLARITY forward.
3. Alignment with GENIUS Act rules: If CLARITYs yield framework slots cleanly into the existing GENIUS 1:1 reserve and state oversight regime, that reduces legal ambiguity for stablecoin issuers.

Prediction markets currently price passage as possible but not guaranteed, and Fed officials are still publicly calling for tight control over stablecoin reserves and activities, which suggests any compromise will lean conservative on yield.

Conclusion

The emerging CLARITY Act deal is really about who can legally share yield on dollar stablecoins and under what constraints. If lawmakers land on a balanced compromise, it could legitimize onshore stablecoin products and support deeper institutional use. If they adopt a broad prohibition, core stablecoin plumbing will still be regulated, but most yield innovation will likely migrate to foreign or purely on chain venues, limiting what US platforms can offer.