US CLARITY Act Advances as Stablecoin Yield Compromise is Finalized

The US crypto industry has moved a step closer to a comprehensive regulatory framework following the release of final stablecoin yield provisions under the CLARITY Act. Senators Thom Tillis and Angela Alsobrooks published the text intended to resolve a long-standing dispute between traditional banking institutions and digital asset firms regarding the competitiveness of the banking system. The central conflict revolved around whether stablecoin yields would undermine traditional deposits. The resulting compromise seeks to balance the interests of both sectors by limiting how crypto firms can incentivize holders while maintaining the viability of digital asset networks. Under the section titled 'SEC 404. Prohibiting interest and yield on payment stablecoins,' the provisions explicitly prohibit crypto firms from paying any form of interest or yield to customers solely for holding payment stablecoins. This effectively bans products that mirror traditional bank deposits. However, the text allows firms to offer rewards tied to 'bona fide activities,' ensuring that users can still earn incentives based on actual platform and network utility. Industry reactions are mixed. Coinbase executives have urged an immediate markup of the bill, viewing the resolution of the yield dispute as a critical milestone. Conversely, some industry leaders expressed frustration over the loss of risk-free yield. Galaxy Digital's Alex Thorn anticipates that the banking sector may still mount opposition efforts despite the restrictions. Legislative momentum appears to be increasing, with prediction markets now pricing a 55% probability of the act becoming law in 2026. Some senators anticipate the bill could be finalized by the end of May, with a potential markup scheduled as early as the week of May 11.