Coinbase Backs CLARITY Act Compromise Banning Passive Stablecoin Yield

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Coinbase Backs CLARITY Act Compromise Banning Passive Stablecoin Yield

Senators Thom Tillis and Angela Alsobrooks have reached a deal on how stablecoins earn rewards, resolving a major issue that was blocking progress on the Digital Asset Market Clarity Act. This agreement now allows the Senate Banking Committee to begin reviewing and potentially approving the bill.

The updated rules stop payments that operate similarly to bank interest, but continue to reward users for real activity on the platform. Coinbase leaders have publicly supported this decision and are encouraging lawmakers to pass the full bill.

Compromise Bans Bank-Like Stablecoin Yield

As a researcher, I’ve found that this agreement essentially prevents offering rewards that act like interest payments. Specifically, it stops anyone from structuring rewards so they function the same way as earning interest on a bank account – meaning, they can’t be given in a way that provides a guaranteed return, like a yield.

Stablecoin balances can still factor into reward calculations if they pass that equivalence test.

This legislation directs federal agencies to create rules for how stablecoins must be disclosed and to release a list of acceptable promotional practices.

This new guidance will influence how exchanges and brokers reward customers, and it follows recent debates in the Senate about what qualifies as active participation.

The Senate Banking Committee is likely to begin reviewing the CLARITY Act around the week of May 11th. According to predictions made by traders on Polymarket, there’s a 68% chance the bill will become law this year, despite a recent delay and strong lobbying efforts by banks targeting Senator Tillis.

Coinbase Calls Outcome a Win for Crypto

According to Coinbase’s Chief Legal Officer, Paul Grewal, recent discussions have resulted in a compromise that shouldn’t significantly hinder the overall legislation. He believes concerns about potential risks have been exaggerated in public discussions.

He explained in a post that this result maintains rewards for actually using crypto platforms and networks – something the banking industry had requested.

Faryar Shirzad, Coinbase’s head of policy, also highlighted advancements in how digital tokens are categorized, protections for decentralized finance (DeFi), and the process of turning assets into digital tokens as key parts of the agreement.

The text of the final rewards provisions within the CLARITY Act is now available. Throughout this discussion, we’ve emphasized that many concerns were based on speculation, not concrete evidence or a true understanding of cryptocurrency. Despite this, the crypto industry demonstrated…

— Faryar Shirzad 🛡️ (@faryarshirzad) May 1, 2026

Now that the question of yield has been settled, the focus is turning to defining which rules fall under the authority of the SEC versus the CFTC, ensuring the safety of staking practices, and establishing clear guidelines for raising capital.

These provisions holding through floor consideration will shape the timeline into summer.

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2026-05-02 13:47