Over the weekend, crypto industry leaders largely expressed approval of a proposed solution to a longstanding dispute over the Clarity Act—a significant crypto bill—though it remains uncertain if this compromise will be accepted by banks.
Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) introduced new language for the Clarity Act on Friday, addressing rewards provided by crypto companies on stablecoin holdings. These stablecoins are cryptocurrencies pegged to the U.S. dollar’s value. The Clarity Act aims to legalize most crypto activities in the U.S., a longstanding priority for the industry.
For months, the banking sector and crypto firms have been at odds over stablecoin rewards. Banks view these as competition against traditional savings accounts with low yields, while crypto companies argue they were legalized under last year’s GENIUS Act.
Despite key crypto stakeholders endorsing the compromise, banks have refrained from commenting publicly.
The proposed compromise prohibits rewarding stablecoins in a manner akin to interest or yield payments on bank deposits. However, rewards could still apply to stablecoin transactions and other account activities. The legislation assigns regulators and the Treasury Secretary the task of listing permissible reward categories post-Clarity Act passage, including those for governance participation, validation, and staking.
Policy leaders hold varied interpretations of these changes. A DC insider told Decrypt that banks might oppose exceptions for staking-related rewards linked to account balances.
Conversely, some digital asset policy figures argue the language significantly limits crypto firms from offering direct rewards on stablecoin holdings since such programs weren’t banned by the GENIUS Act and had been operational for years. Coinbase, for instance, previously offered up to 5% yield on USDC stablecoins but later restricted this to paid subscribers.
Coinbase distanced itself from the Clarity Act in January due to concerns over potential restrictions on stablecoin yields but expressed support for Friday’s proposal. Coinbase’s chief policy officer, Faryar Shirzad, stated via a post that the ability for Americans to earn rewards based on crypto platform use was preserved.
Coinbase CEO Brian Armstrong also supported the language, urging the Senate Banking Committee to proceed with a delayed vote on the bill.
In contrast, banks have not publicly endorsed this language. Major bank trade groups lobbied the Treasury Department last week to impose stricter stablecoin yield restrictions under the GENIUS Act implementation.
The American Bankers Association emphasized that crypto firms must be prohibited from both directly offering and indirectly facilitating yield-like benefits for stablecoin holders through cosmetic structuring.
With time pressing, Tim Scott (R-SC), chair of the Senate Banking Committee, plans to schedule a Clarity Act vote this month. The committee will convene only twice in May, and with midterms approaching, pro-crypto senators have stressed that failure to pass the bill now could delay digital asset legislation indefinitely.