Clarity Act Draft Would Bar Yield on Passive Stablecoin Holdings

Industry executives reviewed draft stablecoin yield provisions in the Digital Asset Market Clarity Act during a closed-door meeting on Capitol Hill on Monday, and early feedback was that the language is overly narrow and unclear, CoinDesk reported. The draft, negotiated by Sens. Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.), would prohibit paying yield simply for holding a stablecoin and would restrict arrangements deemed economically equivalent to a bank deposit. Rewards tied to user activity—such as loyalty programs, promotions, subscriptions, transactions and platform usage—would remain allowed. Market participants said the draft leaves uncertainty around how "activity" would be defined in practice. Stocks with stablecoin exposure sold off Tuesday as investors weighed the prospect of tighter limits on stablecoin yield. Circle shares fell 19%, while Coinbase declined 8%. Coinbase CEO Brian Armstrong, who withdrew the company's support for the Clarity Act in January over yield restrictions—prompting the Senate Banking Committee to delay its markup—has not commented on the revised text. Stablecoin-related revenue accounted for about 20% of Coinbase's total revenue in Q3 2025. The yield issue has been the biggest sticking point for the bill in the Senate since January. Banks, led by the American Bankers Association, have argued that stablecoin rewards could pull funds from traditional savings accounts. Executives at JPMorgan and Bank of America cited a Treasury study suggesting banks could lose as much as $6.6 trillion in deposits if stablecoins were able to offer unregulated yields, CNBC reported. The GENIUS Act, signed into law in July 2025, barred stablecoin issuers from paying interest directly to holders but did not stop third-party platforms from offering rewards—an opening experts said would become a central regulatory battleground. What's next The agreement removes the main obstacle to a Senate Banking Committee markup, now tentatively slated for late April after the Easter recess. Senate Majority Leader John Thune signaled earlier this month that the bill was unlikely to move before then. Next steps include a full Senate floor vote requiring 60 votes, reconciliation with the Senate Agriculture Committee's version passed in January, alignment with the House bill that passed 294–134 in July 2025, and presidential signature. Polymarket currently puts the odds of the Clarity Act being signed into law in 2026 at about 63%. This article was produced with the assistance of AI workflows. All stories are curated, edited and fact-checked by a human.