Senators Finalize CLARITY Act Stablecoin Yield Rules

On Friday, Senators Thom Tillis and Angela Alsobrooks released the final text of the CLARITY Act, including a provision titled “SEC 404. Prohibiting interest and yield on payment stablecoins.” The provision bars crypto firms from paying any form of interest or yield to customers solely for holding payment stablecoins while permitting rewards tied to bona fide platform or network activity.

SEC 404 states that payments made only for holding stablecoins are comparable to bank deposits or other interest-bearing products and therefore prohibited. The text allows firms to design reward programs when rewards are linked to genuine user actions such as transactions or participation in network services.

The yield language reflects months of negotiation between banking groups and crypto industry representatives. Banking organizations argued that unrestricted stablecoin yields could undercut traditional deposits and raise safety concerns for the banking system. Lawmakers narrowed some reward allowances but kept room for activity-based programs that platforms say support payments and wallet services.

Industry responses were swift. Coinbase chief legal officer Faryar Shirzad wrote on X, “It’s time to get CLARITY done,” and added that while banks secured more restrictions on rewards, the text preserves the ability for Americans to earn rewards based on real usage of crypto platforms and networks. Coinbase CEO Brian Armstrong posted, “Mark it up.” Helius Labs CEO Mert Mumtaz described the provision as offering “the clarity of not getting risk-free yield on your dollars without using a bank.”

Galaxy Digital head of firmwide research Alex Thorn wrote that the release of the text suggests the Senate Banking Committee could schedule a markup imminently, possibly the week of May 11, and cautioned that banks might increase their opposition efforts. Senator Bernie Moreno has indicated he expects the CLARITY Act to advance by the end of May, and Senator Cynthia Lummis earlier urged colleagues to act, saying, “It’s now or never.”

After the text was released, traders on the Polymarket prediction market raised the probability that the CLARITY Act will be signed into law in 2026 to about 55 percent, an increase of roughly nine percentage points in 24 hours.

If the Senate Banking Committee schedules a markup, members will debate the bill’s broader provisions alongside the stablecoin language. Committee votes and any further changes will determine how the legislation proceeds to the Senate floor.