The fight over passive rewards on stablecoins is getting sharper in Washington, and it has become a sticking point for the Senate’s market structure bill, the CLARITY Act. At issue is a basic question with large consequences: should dollar-pegged stablecoins be limited to payments and settlement, or should they be allowed to offer yield and compete with bank accounts and money market funds.
The debate picked up in late March 2026. Banking groups are pressing lawmakers to block stablecoin rewards that resemble deposit interest. Their concern is the rate gap. Traditional savings accounts currently pay about 0.01% to 0.50% a year, while some crypto platforms offer roughly 3.5% to 4% on stablecoin deposits such as USDC. Banks say that difference could pull deposits out of the conventional financial system.
Bank and crypto positions split over what stablecoins should be
The bill, which is backed by the president, is meant to create a broader rulebook for the U.S. crypto market and bring clearer classifications for digital assets. But negotiations have broken down over the yield question. Banks view yield-bearing stablecoins as products that begin to resemble deposit substitutes. Crypto firms see them as a key mechanism for attracting users and keeping dollar liquidity on-chain.
If passive rewards are banned, retail participation could weaken. Many users hold funds in stablecoins while waiting for trading opportunities and use those balances to earn passive returns. Remove that feature, and on-chain dollar demand could soften while platform liquidity declines. This is not just a product issue.
Exchange revenue and stablecoin balances could come under pressure
The report says platforms including Coinbase, Kraken, and Gemini currently benefit from stablecoin balances through interest-sharing arrangements and treasury strategies. If stablecoin deposits fall, platform revenue and overall activity may also take a hit. Yield-bearing stablecoins have gained traction during volatile market periods because they let investors park funds in relatively stable assets while still earning a return.
Crypto firms may still adapt. The article notes that companies have responded to similar restrictions before by changing the structure of reward programs, replacing direct interest with incentives tied to trading, payments, or liquidity participation. If U.S. pressure rises, some yield programs could also move outside the country, where global platforms may continue to offer them under local rules.
Regulatory clarity remains the bigger issue for the industry
Even with the dispute over rewards, many in the sector still place more weight on clearer rules overall. The CLARITY Act is designed to define digital commodities and securities and reduce enforcement uncertainty. Whether stablecoin yield survives matters to product economics, but the bill’s broader classification framework affects compliance planning and market structure across the industry.