Senate CLARITY Act draft would bar stablecoin yield, leaves 'rewards' definition to three agencies
A new Senate compromise draft tied to the CLARITY Act would prohibit crypto platforms from paying yield on stablecoin balances, while directing three federal agencies to determine what activity-based 'rewards' can still be offered, according to reporting by journalist Eleanor Terrett.
Terrett said she obtained details from an internal stakeholder email circulated after closed-door Capitol Hill reviews involving crypto industry leaders.
The language follows weeks of negotiations between Senators Thom Tillis and Angela Alsobrooks. Bank representatives are expected to review the same text on March 25.
Under the proposal, digital asset service providers—including exchanges and brokers—would be barred from offering yield "directly or indirectly" on stablecoin holdings. The draft also bans arrangements considered "economically or functionally equivalent" to interest.
At the same time, rewards linked to loyalty programs, promotions, or subscriptions could remain permissible, so long as they do not meet the draft's equivalence standard. The SEC, CFTC, and the U.S. Treasury would be required to jointly define allowable rewards and publish anti-evasion rules within 12 months.
Terrett reported that the draft's language is raising concerns in some quarters. The "economic equivalence" standard could give future regulators broad discretion, and restrictions on tying rewards to balances may limit how firms structure incentives.
Still, the reported outcome largely matches expectations and is described as broader than the original Tillis-Alsobrooks proposal, which would have imposed tighter constraints on crypto platforms.
The CLARITY Act passed the House 294-134 in July 2025 and advanced through the Senate Agriculture Committee in January 2026. A Senate Banking Committee markup is targeted for late April. Senator Bernie Moreno has warned that if the bill does not reach the Senate floor by May, digital asset legislation could stall until after the midterm elections.
The stakes are significant for publicly traded crypto firms. Bloomberg Intelligence analysts estimate stablecoin revenue accounted for about 19% of Coinbase's total 2025 revenue. Feedback from banks on March 25 could still influence final wording ahead of the committee vote.
