Leading US banking groups have opposed the proposed compromise within the Clarity Act regarding stablecoin yields, creating a public disagreement with Coinbase and Circle.
Summary
- US banking associations pushed back against the stablecoin yield provisions in the Tillis-Alsobrooks Clarity Act compromise.
- Coinbase and Circle immediately backed the deal, with Coinbase CEO Brian Armstrong posting “Mark it up” after the text dropped.
- The split between traditional finance and crypto trade groups is now the central obstacle standing between the Clarity Act and a Senate committee markup.
As a researcher following the development of stablecoin regulation, I’ve observed significant pushback from major US banking associations regarding the compromise reached in the Clarity Act by Senators Tillis and Alsobrooks. Essentially, these groups believe the proposed deal creates unacceptable risks for traditional banks. Their primary concern is that stablecoins offering yields could pull massive amounts of money – potentially trillions of dollars – away from traditional bank deposits.
Analysts at Standard Chartered predict that allowing an unlimited yield provision could lead to as much as $500 billion in deposits being withdrawn by 2028.
Both Coinbase and Circle quickly expressed their support for the agreement once it was revealed, encouraging the Senate Banking Committee to move forward with it. Coinbase CEO Brian Armstrong signaled his approval with a simple “Mark it up,” while the company’s Chief Legal Officer, Paul Grewal, explained that the agreement protects rewards earned through genuine platform use.
The disagreement between traditional banking groups and cryptocurrency companies is now a key focus of the committee’s discussions.
What the compromise actually says
The proposed Tillis-Alsobrooks framework clarifies that stablecoin platforms can’t offer rewards just for holding the coins. Earning rewards will only be allowed if users are actively doing something, like making transactions. The SEC, CFTC, and Treasury Department have a year to create specific rules about what kinds of reward programs are acceptable under this new guideline.
Banking groups, such as the North Carolina Bankers Association, asked their members to reach out to Senator Tillis and request revisions to a deal they had recently helped create.
Ripple CEO Brad Garlinghouse expressed optimism that the bill will eventually pass, noting a significant positive change in recent days while speaking at Consensus 2026 in Miami on May 5. Despite the vote still being delayed, he sees progress. With the Memorial Day recess starting May 21, there’s limited time left for lawmakers to reach a decision before the session ends.
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2026-05-05 21:12