Senators Push Stablecoin Yield Deal to Revive Clarity Act

The Digital Asset Market Clarity Act has been sitting in limbo for months, and the reason is less about crypto ideology than about a very old-school banking fight over deposits. U.S. senators are now trying to thread a needle that banks and crypto platforms both claim is too narrow — a compromise on stablecoin yield that neither side will love but everyone might grudgingly accept.

What Is Blocking the Digital Asset Market Clarity Act?

Why stablecoin rewards became the bill's biggest obstacle

The short answer: banks. The U.S. banking lobby moved effectively to stall the Digital Asset Market Clarity Act over a single, combustible issue — whether crypto exchanges should be allowed to pay rewards on stablecoin holdings. Banks argue those rewards function like deposit interest, pulling money out of the traditional banking system. Crypto platforms say they're a routine consumer incentive, no different from credit card points.

Senator Angela Alsobrooks, a Maryland Democrat, addressed an American Bankers Association summit in Washington on Tuesday and didn't sugarcoat the situation. Both sides, she said, are going to be "just a little bit unhappy" — which, frankly, is probably the most honest framing anyone has offered on this bill so far. She's been working with Senator Thom Tillis, a North Carolina Republican, to secure a long-delayed Senate Banking Committee hearing on the legislation.

"The compromise that myself and Senator Tillis have been working on is one that we believe will allow us to have the guardrails in place that will help us to prevent — in all the ways we can — the deposit flight that we do not want to see happen, and to allow the innovation to grow at the same time," Alsobrooks said. Translation: give banks enough protection to stop screaming, give crypto enough room to keep building.

We absolutely have to have these protections to prevent the deposit flight, but we're going to probably have to make some compromises.

The GENIUS Act's Yield Ban Is the Fault Line

Here's the legislative backstory that matters. The GENIUS Act — the stablecoin framework that passed earlier — explicitly barred payment stablecoin issuers from paying interest to attract customers. That was a concession to banks. Now, the American Bankers Association president Rob Nichols is arguing that unless crypto exchanges and affiliated companies are bound by the same restrictions, the result is effectively a backdoor around congressional intent.

He's not wrong about the mechanics. If a stablecoin issuer can't pay yield but a crypto exchange holding those stablecoins can funnel rewards to customers through a separate wrapper, the ban becomes porous. That's the loophole banks are asking Congress to seal. The crypto industry, for its part, has been arguing that rewards programs structured as customer incentives — rather than yield on the stablecoin itself — should be permitted.

Senator Mike Rounds, a South Dakota Republican and Senate Banking Committee member, admitted on Tuesday he's still not sure how to handle this cleanly. His emerging view: rewards can't be tied to the dollar amount sitting in an account, but maybe could be tied to how active the account is. "We're trying to reflect that in the discussions," he said — about as noncommittal as a senator can sound without actually saying nothing.

Does the Dimon Signal Change Anything?

Potentially. JPMorgan Chase CEO Jamie Dimon — the most powerful voice in U.S. banking — recently suggested in an interview that the industry could accept transaction-based rewards. That's the same position the crypto industry has been pushing in White House meetings. When Dimon moves toward crypto's position, that's not a small thing. It narrows the gap considerably and gives senators like Alsobrooks and Tillis something concrete to build language around.

The U.S. Office of the Comptroller of the Currency also recently proposed a rule that adopted much of the GENIUS Act framework. Its stance on stablecoin yield was read as ambiguous by parts of the industry — the OCC said it wouldn't allow evasions of the yield ban, but crypto advocates came away believing there was enough room to build compliant rewards programs. That's the kind of regulatory ambiguity that gives lawyers a lot of work and gives everyone else a headache.

Call it cautious optimism, but the legislative path is starting to look less blocked than it did a month ago. If the Senate Banking Committee can agree on compromise language, the next step would be a markup hearing — the one that was delayed earlier this year. From there, the bill would need to merge with a version that already passed the Senate Agriculture Committee, then face a full Senate floor vote.

What Else Could Kill This Bill?

Stablecoin yield is the immediate bottleneck, but it's not the only one. Senate Democrats have raised separate concerns about decentralized finance (DeFi) vulnerabilities, particularly around illicit finance. They've also demanded that Democrats be appointed to vacant roles at both the CFTC and the SEC before they play ball.

Then there's the most politically toxic demand of all: a ban on senior government officials profiting from personal crypto business ties. That language is pointed squarely at President Donald Trump, whose memecoin and crypto business interests have become a recurring flashpoint in these negotiations. That's not a technical dispute over stablecoin mechanics — that's a political fight that has nothing to do with market structure and everything to do with who's sitting in the White House.

Procedurally, a full Senate vote would require a meaningful number of Democrats to join Republicans, and that coalition looks uncertain right now. Floor time is scarce. Trump has reportedly threatened to hold up approved legislation until Congress delivers a voter-ID package he can sign before the midterm elections. And somewhere in the background, U.S. foreign policy commitments — including the conflict in Iran — are competing for Senate bandwidth.

The crypto industry has been waiting years for this legislation. The compromise Alsobrooks and Tillis are building might be the closest it's gotten to the finish line — or it might just be the latest near-miss in a bill that keeps almost happening.