TLDR
- Crypto firms could offer rewards tied to stablecoin use, but not APY on idle balances.
- Senate Banking may schedule a Clarity Act markup after the yield deal.
- Coinbase backed the compromise after raising concerns earlier this year.
- Grassley is reviewing Section 1960 language tied to software developers.
- Ethics talks may continue after the bill clears Senate Banking.
Senate talks on the Clarity Act moved closer to a committee markup after negotiators released a stablecoin yield compromise. The deal would let crypto firms offer rewards tied to real platform use, but it would bar yield on idle stablecoin balances. Lawmakers are also reviewing DeFi language, software developer protections, and ethics provisions before a vote in the Senate committee.
Yield Deal Moves Senate Banking Talks Forward
The compromise aims to settle a dispute between crypto firms and banks. The talks lasted about three months. Both sides focused on stablecoin rewards, customer yield, and bank deposit risks.
Under the deal, crypto platforms may offer cashback and usage-based perks. They may also offer free or discounted memberships. However, they cannot pay APY on funds that sit unused in accounts. The text also targets rewards that are “economically or functionally equivalent” to yield.
Banks had pushed for tighter limits. Crypto groups wanted more room for customer rewards and product design. Senator Angela Alsobrooks had warned that the result may not please either side. “All of us will probably walk away just a little bit unhappy,” she said in March.
Crypto Firms Accept Limits as Markup Nears
Crypto trade groups backed the compromise and urged quick Senate Banking action. The Blockchain Association, Crypto Council for Innovation, and Digital Chamber supported moving to markup.
Coinbase also signed off on the text. The exchange had pulled support in January over concerns about bank-friendly language. That dispute helped stall an earlier markup plan. Coinbase Chief Policy Officer Faryar Shirzad said the firm protected core reward options. “We protected what matters,” he said, citing rewards based on real crypto platform use. Coinbase CEO Brian Armstrong posted, “Mark it up,” after the release.
Some users on X criticized the delay. Others said the compromise gave banks more control over stablecoin products. A Senate Banking staffer said it was time to move past the yield fight. “Banks should not turn a modest win into a loss,” the staffer said Friday.
DeFi Text and Ethics Talks Remain Open
The next step depends on final text changes before a markup. Chairman Tim Scott is expected to schedule the Senate Banking Committee vote. Industry leaders expect action when Congress returns from recess. The week of May 11 is seen as a possible window. The week of May 18 is another option. The Senate then leaves for Memorial Day recess.
DeFi language is still under review. The Blockchain Regulatory Certainty Act and software developer protections remain central issues. Senator Chuck Grassley is expected to review Section 1960 language. That section concerns money laundering rules. The revised text would block safe harbors for developers who knowingly help illicit finance. Law enforcement groups have raised concerns about weaker oversight.
Ethics provisions are also still being negotiated. Some lawmakers are focused on crypto business ties involving public officials. Those talks may continue after the Senate Banking vote. BlackRock is also pressing regulators on stablecoin reserve rules under the GENIUS Act. The firm opposes a 20% cap on tokenized reserve assets. It says risk should depend on credit quality, duration, and liquidity.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
