Senate negotiators have resolved a longstanding dispute over stablecoin rewards, according to Coinbase. This breakthrough paves the way for the CLARITY Act to advance to a markup session after months of gridlock.
The core disagreement involved whether crypto platforms and stablecoin issuers could offer rewards to users. Traditional banks argued that such rewards, resembling interest on deposits, could lure funds away from the banking system. Conversely, crypto firms maintained that rewards tied to genuine platform activity were essential for user engagement.
Coinbase Chief Policy Officer Faryar Shirzad confirmed that the new language strikes a balance: banks secured stricter limits on rewards that mimic deposit interest, while crypto businesses retained the ability to reward users based on actual usage of their platforms and networks.
The compromise, brokered by Senators Thom Tillis and Angela Alsobrooks, prohibits rewards that are economically or functionally equivalent to bank deposit interest. However, it permits activity-based rewards, leaving crypto exchanges and payment firms room to design programs tied to real transactions.
The deal also mandates that regulators establish clear rules on stablecoin disclosures and define which reward structures are permissible. This regulatory guidance will be critical for shaping future reward programs across the industry.
With this obstacle removed, the CLARITY Act could move to a Senate Banking Committee markup as early as the week of May 11. The Securities and Exchange Commission has scheduled a related roundtable in May to discuss digital asset market structure.
Still, the bill faces political hurdles. Some Democrats have raised concerns about potential conflicts of interest involving the Trump family, while other lawmakers prioritize law enforcement and consumer protections. The rewards deal is a significant step, but not the final one, in the legislative journey.