Stablecoin Yield Restrictions Delayed Again, Leaving Crypto Rewards in Legal Limbo

Stablecoin issuers and crypto firms remain in legal limbo over whether they can offer yield or rewards on user balances, as Senate negotiations on the CLARITY Act continue to stall. The delay in finalizing language around stablecoin yield has kept one of crypto policy’s most contentious issues unresolved, with no clear path forward. Banks have long argued that allowing stablecoin rewards could weaken traditional banking by siphoning deposits away from the broader financial system. Crypto firms, however, insist that such rewards are necessary to compete with traditional financial products and to attract and retain users. The current draft of the CLARITY Act would prohibit interest-like payments on idle balances but may permit incentives tied to user activity, such as payments or trading. The language has not yet been published, and no final timeline for resolution has been set. Until then, stablecoin yield remains one of the last major unresolved issues in the bill.