A key roadblock in U.S. crypto legislation eased on Friday after Senators Thom Tillis and Angela Alsobrooks said they had reached an agreement in principle on the stablecoin yield dispute. The issue had stalled the CLARITY Act in the Senate Banking Committee for months.
The deadlock had been in place since January. At the center of the debate was a simple but consequential question: should stablecoins be allowed to offer returns on held balances? Banks and crypto firms took opposing positions. Banks warned that yield-bearing stablecoins could compete directly with traditional deposits and trigger shifts in customer funds, while crypto companies pushed to preserve room for product innovation.
White House talks helped move negotiations
Tillis said discussions with White House officials helped push the talks ahead. Alsobrooks said the agreement was designed to balance crypto innovation with financial stability. She added that the framework could help prevent large-scale deposit migration away from banks.
Patrick Witt, a White House crypto adviser, called the agreement a major step and credited Tillis and Alsobrooks with narrowing political divisions. He said the deal addresses a complicated issue that had delayed broader legislation. Continued White House involvement also points to the bill's importance in federal policy discussions.
Yield limits discussed, final language still pending
The proposal is not finished. Both lawmakers said more work is needed before the text is finalized. Tillis said he plans to review the proposal with industry participants before settling the final legislative language.
Alsobrooks indicated the agreement may restrict yield on passive balances, but no detailed provisions have been released. That leaves open questions about how the rule would apply in practice and which business models it would affect. Witt also said unresolved provisions remain.
Attention is now shifting from the breakthrough itself to industry feedback and final revisions. Even so, the agreement has reopened legislative movement on the CLARITY Act after a lengthy pause.