Stablecoin Yield Clause Becomes the CLARITY Act's Biggest Sticking Point
The Digital Asset Market Clarity Act — the CLARITY Act — passed the US House of Representatives in July 2025 with a 294-134 bipartisan vote, but has since stalled twice in the Senate. The broader framework for assigning regulatory jurisdiction between the SEC and CFTC commands wide support. The real obstacle is narrower but financially consequential: where to draw the line on stablecoin yield, and how much new rulemaking authority to grant regulators.
Senate Timeline: Two Postponements and Counting
In January 2026, the Senate Banking Committee postponed its scheduled markup session on the day it was set to begin, citing unresolved disagreements over stablecoin yield and tokenization provisions. The Senate draft had expanded to 278 pages with over 100 proposed amendments — far broader in scope than the House version. At a crypto summit in March 2026, senators indicated they were still working toward a compromise on yield, while the American Bankers Association maintained its active lobbying campaign against any yield-permitting language. The Senate Banking Committee was eyeing a mid-to-late March markup window but has yet to confirm a new date.
Crypto Industry Objections: Yield Limits Seen as Protecting Bank Profits
The Senate Banking Committee's draft prohibits digital asset service providers from offering interest or yield simply for holding stablecoin balances, while permitting rewards tied to specific user activity. Coinbase CEO Brian Armstrong publicly described the yield restriction as a provision designed to protect bank profits rather than consumers — a pointed critique given that stablecoin-related revenue represented approximately 20% of Coinbase's total revenue in Q3 2025. The Blockchain Association wrote to senators warning that the proposed amendments would undermine a carefully negotiated compromise, reduce consumer choice, suppress competition, and inject uncertainty into the implementation of the already-enacted GENIUS Act. As the regulatory landscape grows more complex, compliance infrastructure such as Trustformer KYT enables stablecoin issuers and digital asset platforms to maintain real-time transaction monitoring and meet AML requirements regardless of how the final rules are written.
Banking Industry Concerns: Yield Threatens the Deposit Base
Banks and their trade groups oppose the bill from the opposite direction. The Bank Policy Institute has argued that allowing stablecoin issuers to pay interest indirectly — through affiliates or exchange revenue-sharing arrangements — effectively circumvents the GENIUS Act's prohibition on yield payments. The concern is that such arrangements would accelerate deposit outflows, particularly during periods of financial stress, undermining banks' capacity to extend credit to households and businesses. Some crypto firms have structured these payments as "rewards," but the banking industry argues rewards are effectively interest by another name.
New Rulemaking Requirements Add Compliance Uncertainty
Beyond the yield debate, crypto industry participants have flagged the volume of new rulemaking requirements embedded in the Senate version as a secondary concern. Even after the bill passes, regulators would be tasked with developing detailed rules across multiple sub-areas, meaning the compliance horizon could extend well beyond the legislative timeline. For businesses that need firm legal boundaries to proceed with product development and institutional partnerships, this creates an additional layer of uncertainty on top of the yield dispute. Deploying monitoring tools like Trustformer KYT ahead of final rulemaking allows firms to stay ahead of compliance demands as definitions are formalized.
Legislative Outlook: Midterm Clock Is Ticking
Treasury Secretary Bessent had targeted spring 2026 for passage, and Ripple CEO Brad Garlinghouse placed the odds at 80 to 90%. However, Fireblocks policy director Sea Markova has warned that the bill is "at risk altogether" if it cuts too close to the November 2026 midterm elections. Industry experts place the probability of passage before midterms at roughly 50 to 60%. If Democrats reclaim one or both chambers, the prospects for any crypto legislation would drop significantly. The narrow legislative window means that the stablecoin yield compromise — whatever form it ultimately takes — will need to be reached in the coming months.