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Home/Markets & Investing/STABLECOIN US LEGISLATION · STABLECOIN REGULATION

The CLARITY Act's ban on passive yield would eliminate stablecoin interest

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Orion Blackwood

stablecoin US legislation · Apr 18, 2026

The CLARITY Act's ban on passive yield would eliminate stablecoin interest

Source: DojiDoji Data Terminal

Stablecoin holders will be unable to earn annual percentage yield on idle balances if the CLARITY Act passes. Returns will be permitted only for active utility, such as payments and platform participation. This ban on passive yield is designed to prevent funds from fleeing traditional bank deposits.

Related Brief3h ago
cryptocurrency regulation

The CLARITY Act Could Shift XRP From Retail Volatility to Institutional Custody

Banks and asset managers can purchase XRP in significant volumes if the CLARITY Act provides the legal certainty required to avoid fines and lawsuits. This institutional entry would move the token away from retail-driven price swings and toward a predicted price range of $2 to $3. The shift depends on the bill's ability to define whether a token is a token is a security and grant the CFTC power over most cryptocurrencies. The House of Representatives passed the the CLARITY Act, which defines digital assets as either digital commodities commodities of investment contracts. Tokens running on decentralized networks, such as XRP, because it runs on a decentralized network, are classified as digital commodities under the jurisdiction of the Commodity Futures Trading Commission (CFTC). This formalization would reduce the risk of SEC enforcement actions. To reach the floor for a vote before Memorial Day, the bill must clear the Senate Banking Committee by mid-May. Senator Lummis warned that missing this window could delay the measure until 2027. Real-world asset activity on the XRP Ledger has increased, with the volume of tokenized assets transferred on the ledger increasing 875% in 30 days to $101.7 million. The total amount of real-world assets on the XRP Ledger is nearly $2.5 billion this year.

Senator Thom Tillis and Senator Angela Alsobrooks are coordinating the wording to determine if holders can receive APY on idle balances. The current draft of the CLARITY Act maintains the ban on rewards for idle balances. This follows a dispute between banks and the cryptocurrency industry over a gap in the Genius Act, which banned stablecoin issuers from directly paying interest but failed to restrict returns provided through third-party platforms.

Related Brief2d ago
stablecoins

USD Coin dominates 42% of trading on Coinone as Circle eyes South Korea without launching a won-pegged stablecoin

USD Coin accounts for 42% of daily trading volume on Coinone, one of South Korea’s major crypto exchanges, as Circle capitalizes on surging demand without launching a won-pegged stablecoin. Circle CEO Jeremy Allaire confirmed the company has no plans to issue a South Korean won-pegged digital currency, sidestepping a regulatory standoff between lawmakers and the Bank of Korea. The central bank and domestic banks oppose allowing tech firms to issue stablecoins, insisting the power belong solely to financial institutions. President Lee Jae-myung campaigned on introducing won-pegged stablecoins, but his administration has been stymied since taking office in June. Allaire, during a visit to Seoul, met with banking executives and crypto leaders, including Coinone, to pitch Circle’s infrastructure as a platform for licensed South Korean entities to issue their own stablecoins. The firm is pursuing a model similar to its expansions in Hong Kong, Singapore, Japan, and Europe—waiting for legal clarity, then seeking a license. For now, Circle’s monetization strategy in South Korea hinges not on launching a new coin, but on the growing use of USD Coin as both a trading pair and investment vehicle.

JPMorgan Chase indicates that this compromise reduces the risk of regulatory arbitrage against the banking system. The passage of the the CLARITY Act would provide a clearer regulatory framework, which reduces legal uncertainty for large-scale investors. Institutional interest in the crypto market increases.

Related Brief2d ago
cryptocurrency regulation

The fight over stablecoin yield is not about returns—it’s about where your money sits and who gets to lend it

Allowing yield on stablecoins doesn’t just change returns—it changes where your money lives and who profits from lending it. That’s the core of the standoff behind the stalled crypto market structure bill, not investor returns or regulatory clarity alone. President Trump signed the GENIUS Act last July, creating a federal framework for payment stablecoins—but it left one question open: can third parties offer yield on them? The answer determines whether stablecoin issuers, fintechs, or banks get to deploy the underlying cash. Banks say yes would trigger deposit flight. The White House Council of Economic Advisers estimates the effect differently: banning yield would increase bank lending by $2.1 billion, or 0.02%, under its baseline model. That narrow gain underscores what’s really at stake—control over trillions in float. Senators Angela Alsobrooks and Thom Tillis have reached a bipartisan agreement in principle that permits yield, drawing broad support from the crypto industry. But the Independent Community Bankers of America warns that allowing yield would damage locally based economic growth, a line of defense rooted in the role community banks play outside major financial centers. The Senate Banking Committee canceled a January markup after Coinbase pulled support from the draft. The Senate Agriculture Committee moved its portion forward but lacked Democratic votes. Now, the White House is pushing hard for passage, with Treasury Secretary Scott Bessent urging Republicans to act. Yet the path remains blocked—not by lack of compromise, but by competing visions of financial control. The final bill’s passage hinges on whether senators prioritize innovation over community bank stability.

stablecoin US legislationstablecoin regulationcrypto money laundering enforcementcrypto IRS rulingETF inflows datacrypto regulation bill

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