So here’s the new season of “Regulation and Chill”: US banking trade groups are begging to tweak the stablecoin yield part of the CLARITY Act before it goes to markup next week. After months of haggling, lawmakers, crypto folks, and banks basically agreed on “how to let stablecoins yield”-in other words, how to make this not a total financial sitcom.
In particular, the CLARITY Act will ban all forms of passive, deposit-like interest on stablecoins, effectively preventing competition with traditional bank savings. However, the bill would permit all forms of rewards tied to bona fide activities, including staking, transaction activity, or liquidity provision. Essentially, the aim is to promote a “buy and use” approach towards stablecoins, rather than “buy and hold.”
Banking Unions Move To Close Passive ‘Loopholes’
On X, May 8, independent reporter Eleanor Terrett shared a letter from the banking trade groups proposing changes to the stablecoin yield section in the CLARITY Act. The parties to this letter included the American Banking Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, Independent Community Bankers of America, and National Bankers Association.
The proposed revisions were aimed at declaring an absolute ban on passive interest and preventing any deposits flight from traditional financial institutions. As you can see below, they proposed some serious grammar gymnastics-especially within Section 404(c)(1)-replacing “functional and economic equivalent” with “substantially similar” in defining passive income yield and stablecoin-related yield mechanisms.
NEW: Banking trades are mounting a coordinated push for revisions to the stablecoin yield compromise ahead of an expected Clarity Act markup next week, arguing the current language still leaves room for rewards programs that could effectively replicate yield.@bankpolicy,…
– Eleanor Terrett (@EleanorTerrett) May 8, 2026
There is also a recommendation to omit subsection (3)(B) entirely, which they say introduces ambiguity that undermines the main objective. Still, don’t expect this push to steal headlines, because lawmakers have shifted their attention to other parts of the CLARITY Act. In fact, Terrett notes a Senate aide calling the effort “pretty milquetoast.”
CLARITY Act Approaches Key Mark-Up Stage
In other developments, the US Senate Committee on Banking, Housing, and Urban Affairs is set to hold a markup session for the CLARITY Act on Thursday, May 14, at 10:30 AM EST, per Terrett in a separate post.
During this process, committee members will review the bill, debate proposed amendments, and vote on whether it should advance to the full Senate. If the committee pass is granted, the CLARITY Act must then survive a full Senate vote, win a House passage, and land on the President’s desk to be signed into law. Yes, it’s a long, glamorous gauntlet.
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2026-05-10 04:56