Stablecoin Rewards Compromise Clears Path for CLARITY Act Senate Vote

The Digital Asset Market Clarity Act of 2025 could bring $220 billion in offshore stablecoins under US regulation and enable the tokenization of bonds, real estate, and trade finance. Coinbase Chief Policy Officer Faryar Shirzad predicts a Senate Banking Committee markup this month and a full floor vote in May 2026.

The bill, known as the CLARITY Act, passed the House in July 2025 with a 294-134 vote but stalled in the Senate Banking Committee. The deadlock centered on whether holders of dollar-pegged stablecoins could earn passive yield. Traditional banks and the American Bankers Association argued that returns of 3-5 percent on stablecoins would trigger deposit flight from low-yield bank accounts, weakening the core funding base for lending.

That argument was undercut by a review from the White House Council of Economic Advisers, which found no evidence that stablecoin rewards cause deposit flight. A compromise has emerged: pure passive yield is banned, but activity-based rewards tied to platform usage or payments are permitted. Shirzad stated that Coinbase has conceded the point on passive yield, noting that the remaining dispute is the specific language of the fine print.

Treasury Secretary Bessent, Senator Tillis, and the Senate Banking Committee are working to resolve the final issues. Missing the May window would likely push comprehensive reform into the next Congress, delaying passage until 2027 or beyond.