Clarity Act edges toward Senate markup as stablecoin fight narrows options for crypto yield

Stablecoin yield compromise puts CLARITY back in motion.

The CLARITY Act, a sweeping U.S. digital asset market structure bill, is inching closer to its next procedural test in the Senate after negotiators released compromise language on stablecoin rewards that had stalled progress for months. CryptoSlate reports that senators Thom Tillis and Angela Alsobrooks unveiled revised text last week targeting yield on stablecoin balances, raising expectations that the Senate Banking Committee could finally take up the bill the week of May 11 following an April delay. A policy note from Brownstein Hyatt Farber Schreck notes that H.R. 3633, the House version of the CLARITY Act, passed the House in July 2025 by a 294–134 bipartisan vote and cleared the Senate Agriculture Committee in January 2026, but has repeatedly slipped in Banking over stablecoin language.

The current draft goes hard at that issue. According to Fintech Weekly, a recent version of the Digital Asset Market Clarity Act text reviewed in closed-door Capitol Hill sessions would prohibit offering yield “directly or indirectly” on stablecoin balances and ban anything “economically or functionally equivalent to bank interest.” The provision applies not only to issuers but also to exchanges, brokers and affiliated entities, closing the structural workarounds that had allowed platforms like Coinbase to continue passing stablecoin rewards to users even after the earlier GENIUS Act restricted issuers themselves.

CryptoRank, citing Senate staff and industry sources, says the latest compromise narrows but does not eliminate yield: Banking Committee staff have floated language that may still allow rewards tied to promotional programs or non-interest-like incentives, but the thrust is clear—no more passive, deposits-style interest on stablecoins that might compete head-on with bank savings products. That is exactly what major U.S. banks lobbied for, with TheStreet reporting that large institutions have warned lawmakers the CLARITY framework “may not fully protect deposits or limit risks” unless it clamps down on token yields that look like shadow banking.

What CLARITY means for BTC, ETH, stablecoins and DeFi

For the broader crypto market, the CLARITY Act is part of a broader regulatory convergence. Galaxy Digital notes that CLARITY is advancing alongside the Financial Innovation and Technology for the 21st Century Act (FIT21), which the House passed in May 2024 by a 279–136 vote to divide jurisdiction between the SEC and CFTC based on whether a blockchain is “functional” or “decentralized.” That combination, plus a March 2026 joint SEC‑CFTC interpretive release creating a five-category token taxonomy and explicitly naming 16 assets as digital commodities, is laying the legal foundation for assets like bitcoin and ether to sit firmly under CFTC oversight while a long tail of tokens remain securities.

Brownstein’s April 2026 update underscores that CLARITY is now less about “if” than “when,” though time is tight heading into the U.S. election cycle. KuCoin’s legislative tracker frames the status as “pending” but shifting toward inevitability, with a provisional timeline of a Senate Banking markup in mid‑March or mid‑May, a full Senate vote by late spring and a potential presidential signature in June that would trigger a provisional registration period for digital asset intermediaries.

Near term, the most direct market impact is on stablecoin economics and yield-bearing products. A Payments Association analysis argues that as regulation tightens, banks will be able to issue their own stablecoins and integrate them into settlement and treasury operations, while non‑bank issuers shift toward fee-based models rather than interest-like rewards. For centralized exchanges, a CLARITY-style ban on stablecoin yield would force a pivot from “earn” products that simply pass through issuer rewards toward more complex structures—staking, basis trades, or tokenized credit—that may fall outside the bill’s definition of deposit-like returns.

Prediction markets already reflect the stakes. CryptoRank notes that Polymarket traders now put the odds of CLARITY becoming law in 2026 at about 55%, up nine percentage points in a single day after the stablecoin yield compromise text surfaced. As FinTech Weekly’s tokenization hearing coverage put it, the U.S. is in a rare “legislative window” where the SEC‑CFTC taxonomy, Nasdaq’s approval of tokenized securities trading, a dedicated House tokenization hearing, and an imminent CLARITY markup are all converging in the same quarter. If that window closes without final passage, U.S. crypto markets will remain on what Galaxy calls “borrowed time”—operating under patchwork enforcement and ad hoc guidance rather than the statutory clarity that could finally anchor bitcoin, ether, stablecoins and DeFi inside a coherent federal regime.