TLDR
Work on the US Digital Asset Market CLARITY Act has slowed as senators struggle to finalize how, and if, stablecoins can pay yield to users.
- The latest draft language on stablecoin yields has been delayed again, with negotiators split over banning rewards on idle balances versus allowing activity-linked incentives.
- The outcome will reshape stablecoin business models, affecting exchanges, DeFi, and competition with bank deposits as stablecoin supply already exceeds about $320 billion.
- Key signals to watch are Senator Thom Tilliss yield draft, the Senate Banking Committee markup schedule, and whether lawmakers can act before the political window closes around the 2026 elections.
Deep Dive
1. What Is Stuck Now
Senator Thom Tillis, working with Senator Angela Alsobrooks, has postponed releasing revised language on stablecoin yields, saying the text is unlikely to be published this week while they wait on the Senate Banking Committees markup schedule. Current reporting says the draft would restrict rewards on idle stablecoin balances but still allow yield tied to transaction activity, such as payments, loyalty programs, or other platform use, and insiders suggest big structural changes are now hard to make to this draft text. However, banks and crypto firms remain far apart, so the stablecoin yield section is still the main obstacle keeping the CLARITY Act from moving to markup and a full Senate vote.
The legislative text on yields is mostly written, but political agreement around it is not, which keeps the overall bill in limbo.
2. Why Stablecoin Yields Matter
Under the earlier GENIUS Act, issuers are barred from paying interest directly, but third-party platforms can still offer yield, a loophole CLARITY is meant to clarify. Banks argue that generous stablecoin yields would pull deposits out of the banking system, while crypto firms like Coinbase say an outright ban would kill innovation and cement bank dominance. Meanwhile, stablecoin supply has hit roughly $320 billion and yield-bearing stablecoins tied to Treasuries or DeFi have grown more than 15 times faster than the rest of the market since late 2025, splitting the market between pure payment tokens and yield-focused instruments.
Depending on the final rules, US users may see stablecoin rewards pushed into more cashback-style activity incentives, stricter bank-like oversight, or more yield products offered offshore instead of in the US.
3. What To Watch Next
An SEC-hosted roundtable and multiple analyses indicate that most other CLARITY issues are close to resolved, with negotiations reportedly down to two or three topics, mainly stablecoin rewards and some DeFi and tokenization details. Prediction markets and bank research put the odds of passage by 2026 around the mid-50 to mid-60 percent range, but there is still no public Senate markup date, and missing the current window could push action into a much tougher post-election environment. If Tilliss yield draft appears and the Banking Committee schedules markup, that would signal real progress; if not, the risk is that comprehensive US crypto rules get pushed back toward the end of the decade.
For now, assume regulatory uncertainty around US stablecoin yields persists; the key trigger to monitor is a formal Senate Banking Committee markup date that includes finalized yield language.
Conclusion
The CLARITY Act is stuck on a very specific question: how far the US wants to let stablecoins behave like interest-bearing money while protecting banks and consumers. With stablecoin use and yield products already large and growing, the eventual compromise on idle versus activity-linked rewards will heavily influence where innovation and liquidity concentrate, and whether that happens inside the US regulatory perimeter or continues to migrate offshore.
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