Following a breakthrough in negotiations, the Senate Banking Committee may soon consider the Digital Asset Market Clarity Act (CLARITY Act), with potential markup scheduled for May 11. The compromise on stablecoin rewards language between Senators Thom Tillis and Angela Alsobrooks has been heralded as a positive step towards scheduling the committee vote, according to Galaxy Digital’s Alex Thorn.
The CLARITY Act, which had stalled over disputes regarding crypto companies offering stablecoin-related rewards, now includes provisions to prevent these rewards from acting like interest on deposits. This compromise aims to balance interests between traditional banks and cryptocurrency firms, as banks argued such rewards could divert funds away from regulated lenders.
Despite the agreement, banking lobbyists remain wary. The American Bankers Association (ABA), supported by 52 state associations, has urged the Office of the Comptroller of the Currency (OCC) to tighten rules on stablecoin yields, warning that indirect channels could undermine deposit bases essential for small business lending.
Coinbase’s chief policy officer, Faryar Shirzad, noted the compromise allows Americans to earn rewards based on genuine crypto platform usage. This development removes a significant industry opposition and positions the U.S. as a leader in the financial system amid geopolitical competition.
The ABA continues to push for regulatory clarifications, emphasizing that broad interpretations of yield bans could lead to systemic risks by altering global funding markets.
As May approaches, supporters view it as a critical period to advance the CLARITY Act through Senate Banking Committee processes. Achieving a markup and committee vote soon would set the stage for further legislative steps, including reconciliation with House-passed versions and potential presidential approval before midterm elections potentially shift political priorities.
Senators like Cynthia Lummis, who advocate for crypto-friendly legislation, stress that delays could defer comprehensive market reforms into 2030. Therefore, the week of May 11 is pivotal in determining if there remains sufficient time and support to advance this year’s legislative efforts.