Senators Thom Tillis and Angela Alsobrooks have confirmed a bipartisan compromise on stablecoin rewards in the CLARITY Act. The framework, reported on May 5, bars stablecoins from offering returns that resemble bank deposit interest, while still allowing incentives linked directly to activity on crypto platforms. That agreement has pushed the bill closer to consideration by the Senate Banking Committee.
New line drawn between yield and platform rewards
The compromise says stablecoins cannot pay users for simply holding idle balances. In practice, that means no return structure that looks like interest on deposits. At the same time, the proposal leaves room for other forms of incentives if they are tied to platform usage, including transaction-based rewards such as cashback or discounted services.
In a joint statement, the senators said they had worked with stakeholders for months and that banks had provided input throughout the drafting process. They described the outcome as a consensus product and said it supports progress on the CLARITY Act.
Bank groups say the text still leaves openings
Banking trade associations objected after the language became public. The American Bankers Association and the Bank Policy Institute argued that the proposal does not fully ban yield and could still permit rewards that function in a similar way. Their position is that lawmakers need clearer and tighter limits to reduce the risk of deposits moving out of traditional banks.
The groups said they plan to send detailed recommendations to lawmakers soon. Even so, the reporting indicates that major revisions are not expected at this stage. A Senate staffer took a similar view, saying it was time to move beyond the yield dispute and that banks should not press a limited win into a broader fight.
Markup could come in the week of May 11
Lawmakers have been debating stablecoin reward structures for nearly three months. The latest compromise now sets a more specific standard: no returns on idle balances, and rewards must be directly connected to use within a platform. Coinbase, which had earlier raised concerns about bank influence, backed the updated language. Chief Policy Officer Faryar Shirzad said the deal preserves user rewards tied to activity.
Senate Banking Committee Chairman Tim Scott is expected to schedule a markup soon, possibly in the week of May 11. With the disagreement between crypto firms and bank groups still unresolved, the CLARITY Act is moving into a more decisive phase on Capitol Hill.