Senate’s Stablecoin Yield Decision: Passive Rewards Banned, Activity-Based Stay

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CLARITY Act Update: Senate Makes Big Decision on Stablecoin Yield Rewards

After a lengthy debate, a deal has been reached on rules for stablecoin yields as part of the Digital Asset Market Structure CLARITY Act. The final version of the bill is now available, representing a compromise between banks and companies in the crypto world.

As first reported by Punchbowl News, a major disagreement within the bill has been settled just weeks before a key Senate review scheduled for mid-May.

Yield Debate Ends With a Split Decision

At the center of the agreement is a clear line: passive yield is out, activity-based rewards stay.

The revised agreement, reached by Senators Thom Tillis and Angela Alsobrooks, prevents stablecoin companies from offering rewards that act like traditional bank interest. Essentially, they can no longer pay users simply for holding their digital assets.

Payments, transfers, and other real-world uses of the system are still allowed. The new rules also eliminate ways for companies to avoid restrictions by using related businesses.

Crypto Industry Claims a Strategic Win

Even with the new regulations, many leaders in the cryptocurrency world saw the results as ultimately good news. Faryar Shirzad, Coinbase’s Chief Policy Officer, explained that the industry successfully safeguarded its most important aspects.

He explained that the agreement allows Americans to earn rewards simply by using cryptocurrency platforms, and he believes this is a positive move for both innovation and the United States’ ability to compete globally.

Coinbase’s top lawyer, Paul Grewal, agreed, stating that previous discussions often focused on potential problems that weren’t based on how cryptocurrency systems really work. He also pointed out that encouraging rewards for activity is something even bank advocates originally supported.

Not Everyone Is Fully Convinced

However, some people are still worried about the new rules. Ji Kim from the Crypto Council for Innovation explained that these restrictions are much stricter than previously discussed proposals, like the GENIUS Act. This could discourage people from using crypto and harm the United States’ position as a leader in the crypto world, especially since most crypto transactions already happen outside the country.

Policymakers are also trying to manage wider risks to the financial system, especially the possibility of people quickly withdrawing their money from traditional banks.

What Comes Next

Now that the yield problem is mostly resolved, focus is turning to other outstanding issues. These include regulations for decentralized finance (DeFi), ethical guidelines for government officials, and making sure the Senate and House versions of the bill match.

According to crypto analyst Adam Minehardt, the recent price increase in mid-May is now clearly visible, and the main concern is whether support from both Democrats and Republicans will continue.

The CLARITY Act is nearing final approval after months of talks between the White House, the Treasury Department, and Senate leaders. Its passage could significantly shape the future of the cryptocurrency industry, impacting innovation, regulation, and investment.

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2026-05-02 07:06