Stablecoin yield would be prohibited under a recently released agreement addressing this controversial part of crypto market structure legislation, in an approach largely similar to what has been discussed since the start of the year.
The new section of the Digital Asset Market Clarity Act released Friday revealed that the compromise crafted by U.S. Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) would prohibit stablecoin issuers from offering a return based solely on holding stablecoin reserves. It asserts that “depository institutions provide financial services that are integral to the strength of the U.S. economy” and that stablecoin issuers offering similar services “may inhibit” these institutions.
Reaching an agreement means there is likely nothing standing in the way of a Senate Banking Committee hearing (known as a markup) that could finally move the legislation toward another key step in its progress in the Senate, although there are a number of other negotiating points that have not been publicly resolved.
“Mark it,” Coinbase CEO Brian Armstrong wrote in a post on social media site
Coinbase General Counsel Paul Grewal said in a separate post that this language “preserves activity-based rewards tied to actual participation on crypto platforms and networks, which is what the banking lobby has said it wants,” adding that “we are focused on crafting a bill and believe this language should not be the basis for any objections.”
In its legalese, the new text reads: “No covered party shall, directly or indirectly, pay any form of yield interest (whether in cash, tokens, or other consideration) to a restricted recipient – (A) solely in connection with the holding of such restricted recipient’s payment stablecoins; or (B) on a balance of payment stablecoins in a manner that is economically or functionally equivalent to the payment of interest or the yield of an interest-bearing bank deposit. “
This restriction does not apply to incentives “based on bona fide activities or transactions” that are different from the return generated by interest-bearing bank deposits, the text says, maintaining an approach to rewards similar to that which financial companies offer for credit card activities. The restriction applies to loyalty programs or similar efforts.
Senators Alsobrooks and Tillis have negotiated the details of the text over the past few months, after a decision by the Senate Banking Committee on the entire Clarity Act was postponed at the last minute in January. Since then, banking lobbyists and crypto insiders have weighed in on compromise efforts, sometimes in sessions hosted by the White House.
In March, lawmakers announced they had reached a deal that prevented crypto companies from offering returns that resembled interest on deposits, but allowed them to structure rewards programs that did not compete with banks’ core products.
In a statement, Digital Chamber CEO Cody Carbone said the trade association “welcomes the public release of the stablecoin yield language as an important step toward resolving one of the remaining issues between the committee and the markup. We are encouraged to see this process moving forward and will continue to advocate for the power of rewards to drive consumer utility, competition, and innovation in the digital asset ecosystem.”
UPDATE (May 1, 2026, 9:54 p.m. UTC): Adds comments from Coinbase executives.
