A tentative deal on whether stablecoin issuers can pay yield to holders may be the catalyst that restarts stalled work on the CLARITY Act in Washington.
What’s happening
- According to Politico, Senators Thom Tillis and Angela Alsobrooks — both on the Senate Banking Committee — have reached an “agreement in principle” over stablecoin yield. White House officials and other lawmakers are reported to be involved in shaping the terms.
- The talks focus on one of the biggest sticking points that derailed progress earlier this year: can regulated stablecoin issuers directly offer yield to token holders, and if so, under what limits?
Key terms and stakes
- Alsobrooks said the emerging deal aims to “protect innovation” while reducing the risk of deposit flight from the banking system. She indicated the agreement would prohibit yield on so-called “passive balances,” signaling a narrower path for allowable yield features under any new rules.
- The Digital Asset Market Clarity Act of 2025 (commonly called the CLARITY Act) had been poised to move after the GENIUS stablecoin framework became law, but momentum stalled when debate intensified over yield-sharing between issuers and holders.
- Senator Tillis cautioned the industry still needs to review the proposal before anything is finalized, meaning the language could change ahead of any formal action.
Political context and timing
- At the DC Blockchain Summit, Senator Cynthia Lummis said, “We are so close” to passing a broader crypto framework. A spokesperson for Lummis added a deal could come together within days as lawmakers continue to iron out ethics-related language attached to the bill.
- These comments suggest negotiators are trying to fold stablecoin policy and market-structure rules into a wider crypto package. After a January slowdown, discussions appear to be active again — though timing remains uncertain.
Industry and regulatory perspectives
- Banks have been the most vocal opponents of yield-bearing stablecoins, arguing that attractive yields could siphon deposits away from traditional banking accounts.
- The White House has heard the opposite view. Patrick Witt, executive director of the White House Council of Advisors for Digital Assets, has argued concerns are overstated and contended that regulated yield-bearing stablecoins could actually channel new capital into the U.S. banking system.
Why it matters
A compromise on yield could unlock progress on the CLARITY Act and set a pivotal precedent for how stablecoins are regulated in the U.S. The details — especially what counts as a “passive balance” and how yield can be structured — will determine whether the outcome favors crypto firms seeking product flexibility or banks pushing to protect deposit flows. Lawmakers and industry groups will be watching closely as draft language is finalized and circulated for review.
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