The CLARITY Act is back on the move, and this time the timeline looks real. According to Coinbase's internal market view, a Senate markup is expected in the second half of April, with passage potentially by May. Lawmakers reached an agreement in principle on March 20, followed by a new compromise on March 24 that proposes banning passive stablecoin yield while still allowing limited, activity-based rewards like payment incentives.
Stablecoin Yield Ban Takes Center Stage
The latest draft targets passive rewards—users would no longer earn just by holding stablecoins. However, incentives tied to actual usage are still permitted. This is no small adjustment. In 2025, Coinbase and Circle generated around $2.75 billion from reserves backing USDC. Coinbase's share alone was roughly $1.35 billion, close to one-fifth of its total revenue. If passive yield disappears, that revenue stream takes a direct hit.
Coinbase's Position and Countermove
Coinbase isn't opposing the entire bill. It supports clearer rules for DeFi, developer protections, and a defined split between regulators. The issue is the wording around yield. Chief Legal Officer Paul Grewal has warned that vague language today could give future regulators too much power to reinterpret rules. “My memory is a little better than to trust future rogue regulators to faithfully apply the law,” he said. The company is now working on a coordinated counterproposal to keep reward models viable while aligning with regulation. Notably, Coinbase takes a sizable cut from staking rewards—around 35% on major assets—highlighting how central yield-based income is to its business.
Behind-the-Scenes Power Struggles
Tensions are not just regulatory; they're institutional. Jamie Dimon and Brian Armstrong have reportedly clashed over stablecoin economics, even as both firms maintain a working partnership. On the policy side, White House adviser Patrick Witt has made the urgency clear: move now or risk losing the window entirely.
Market Impact: User Returns and Capital Flows
The outcome directly affects users. If broader reward structures remain, stablecoins could continue offering 4–5% returns, keeping liquidity strong. If restrictions tighten, incentives shrink, and capital could shift back toward traditional systems. The full draft is expected soon, and the next few weeks will decide everything. This isn't just another bill; it's a turning point that will shape how crypto operates in the U.S., from user rewards to billion-dollar revenue models.