Senate CLARITY Act compromise targets deposit-like

Senators Thom Tillis and Angela Alsobrooks released compromise language on stablecoin yield in the CLARITY Act on May 2, triggering immediate industry pressure on Senate Banking to schedule a markup. The text bans deposit-equivalent yield on stablecoin balances while preserving a carve-out for rewards tied to “bona fide” activity and transactions.

Key Takeaways

Compromise text released May 2 by Sens. Thom Tillis and Angela Alsobrooks aims to clear the CLARITY Act’s stablecoin-yield sticking point.
The proposal bars interest or yield on stablecoin balances when it is economically or functionally equivalent to a bank deposit, while permitting rewards tied to “bona fide activities or bona fide transactions.”
Major firms and trade groups, including Coinbase and Circle, quickly urged the Senate Banking Committee to move the bill to a markup after the language dropped.
The compromise assigns Treasury and the CFTC to write implementing rules within one year of enactment, leaving key definitions to regulators.

Tillis–Alsobrooks Stablecoin-Yield Deal Reopens the CLARITY Act Path

Sens. Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) released compromise text Friday addressing stablecoin yield in the Digital Asset Market Clarity Act, a market-structure proposal intended to set clearer legal rules for how digital-asset firms and products are regulated.

The timing mattered. Within hours, crypto trade groups and large U.S.-facing firms pushed the Senate Banking Committee to schedule a markup, the committee session where lawmakers debate, amend, and vote on whether to advance a bill. The committee had previously postponed a CLARITY Act markup in January, and the yield language had been described as the final major sticking point and “largely” the biggest obstacle to moving the bill.

Industry messaging converged on urgency. Blockchain Association CEO Summer Mersinger called the agreement a step forward, saying, “We commend Senators Tillis and Alsobrooks for their leadership in reaching this agreement,” and warning, “Every day without a clear legal framework is an invitation for top-tier talent, capital, and innovative companies to locate elsewhere.”

What the Compromise Bans: Deposit-Equivalent Stablecoin Yield

The core prohibition is straightforward in intent. The text bars crypto firms from paying interest or yield on stablecoin balances in a manner “economically or functionally equivalent to a bank deposit.” That framing is designed to shut down passive, deposit-like stablecoin interest products that look and feel like a bank account substitute.

The open question is scope. The Crypto Council for Innovation (CCI) endorsed advancing the bill but warned the new language extends beyond last year’s GENIUS Act baseline. CCI CEO Ji Hun Kim said the text “goes VERY FAR beyond” the GENIUS Act by applying the prohibition framework to “all digital asset market participants,” rather than only stablecoin issuers.

That distinction matters for compliance burden. If the prohibition is interpreted broadly, exchanges, wallets, and other platforms that touch stablecoin balances could be pulled into the same restrictions as issuers.

The Carve-Out: Rewards for “Bona Fide” Activity and Transactions

The compromise does not attempt to eliminate rewards entirely. It explicitly carves out rewards programs tied to “bona fide activities or bona fide transactions,” creating a compliance path for incentives linked to real usage rather than passive holding.

Coinbase’s legal team framed the language as preserving activity-based rewards tied to real participation on crypto platforms. Operationally, the compromise implies firms will need to restructure rewards programs from a “buy and hold” model to a “buy and use” model to fit within the transaction-based caveats.

The practical boundaries remain a moving target. The text directs the U.S. Treasury and the Commodity Futures Trading Commission (CFTC) to write implementing rules within one year of enactment, meaning the definition of “bona fide” will likely be decided in rulemaking, not in the bill text.

Signals to Watch for CLARITY Act stablecoin yield compromise advances

The near-term catalyst is procedural, not rhetorical: whether Senate Banking schedules a CLARITY Act markup following the May 2 compromise release, after postponing one in January.

Next is scope clarity. Any revisions that narrow or explicitly define whether the yield prohibition applies to “all digital asset market participants” versus only stablecoin issuers will determine how widely platforms must retool rewards.

If the bill becomes law, the start of the one-year Treasury/CFTC rulemaking window becomes the real clock traders should care about. Early signals like draft rules or requests for information will shape how “bona fide activities or bona fide transactions” gets enforced.

Finally, watch platform behavior. The first visible tells will be product changes that move stablecoin rewards away from passive balance-based incentives and toward transaction- or activity-linked structures.

Why This Language Could Reshape Stablecoin Rewards Across Platforms

I read this compromise as a targeted attempt to kill the “stablecoin savings account” narrative while leaving room for rewards that look like customer acquisition tied to actual usage. The threshold that matters is whether platforms can credibly redesign incentives so they are earned through activity, not simply paid for sitting on balances, because the text draws that line explicitly.

The real test is whether the prohibition’s scope gets narrowed from “all digital asset market participants” to something closer to issuer-only obligations, and whether Treasury/CFTC rulemaking defines “bona fide” in a way that platforms can operationalize without gutting rewards. If a markup gets scheduled and the carve-out survives implementation, the setup starts to look structural rather than narrative-driven, because it would force a market-wide shift in how stablecoin demand is manufactured and retained.

Sources

CoinDesk