The CLARITY Act is approaching a critical Senate Banking Committee markup, potentially as early as mid-May, after lawmakers reached a fragile agreement on stablecoin rewards. The revised text, unveiled by Senators Thom Tillis and Angela Alsobrooks, would effectively prohibit interest-like yield on stablecoin balances held on exchanges and brokers, forcing centralized finance (CeFi) platforms to revamp reward products that compete with bank deposits. This compromise resolves a months-long stalemate that had delayed the bill’s progress.
Under the current draft, offering yield directly or indirectly on stablecoins would be banned, along with any mechanism economically or functionally equivalent to bank interest. The prohibition applies not only to issuers but also to exchanges, brokers, and affiliated entities, closing loopholes that allowed platforms like Coinbase to pass stablecoin rewards to users despite earlier restrictions from the GENIUS Act. While Senate staff have floated language that might permit promotional or non-interest-like incentives, the overall direction is clear: passive, deposit-style returns on stablecoins that mimic bank savings products will no longer be allowed.
This regulatory push is part of a broader convergence in U.S. crypto policy. The CLARITY Act advances alongside the Financial Innovation and Technology for the 21st Century Act (FIT21), which divides SEC and CFTC jurisdiction based on a blockchain’s decentralization level. A March 2026 joint SEC-CFTC interpretive release established a five-category token taxonomy, naming 16 assets as digital commodities—including bitcoin and ether—while leaving many tokens under securities oversight. These efforts collectively aim to provide statutory clarity for digital asset markets.
For the stablecoin sector, the most immediate impact will be on yield-bearing products. A Payments Association analysis suggests that as regulation tightens, banks will gain the ability to issue their own stablecoins for settlement and treasury operations, while non-bank issuers shift toward fee-based models. Centralized exchanges may need to pivot from simple earn programs that pass through issuer rewards toward more complex structures like staking, basis trades, or tokenized credit—activities that may fall outside the bill’s definition of deposit-like returns.
Prediction markets reflect growing confidence in the bill’s passage. Polymarket traders now assign roughly 55% odds to CLARITY becoming law in 2026, up nine percentage points in a single day after the stablecoin yield compromise surfaced. According to FinTech Weekly, the U.S. is in a rare legislative window where the SEC-CFTC taxonomy, Nasdaq’s approval of tokenized securities trading, a House tokenization hearing, and an imminent CLARITY markup are all converging in the same quarter. If this window closes without final passage, crypto markets will continue operating under patchwork enforcement rather than a coherent federal regime.