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The stablecoin yield deal has a text. Now it has reactions — and they are not uniformly positive.
On Monday, crypto industry leaders attended a closed-door session on Capitol Hill to review the draft language of the stablecoin yield compromise reached in principle last week by Senators Thom Tillis and Angela Alsobrooks. As FinTech Weekly reported, those meetings were the first step in the review process before a Senate Banking Committee markup, now targeted for the second half of April. Banks were scheduled to review the same text on Tuesday.
The draft language, first reported by Eleanor Terrett citing an internal stakeholder email, draws a clear structural line. Digital asset service providers — including exchanges, brokers, and affiliated entities — are prohibited from offering yield directly or indirectly on stablecoin balances, or in any manner that is economically or functionally equivalent to bank interest. The prohibition is broad by design, closing workarounds through affiliates and structuring arrangements.
On the permitted side: activity-based rewards tied to loyalty programmes, promotions, subscriptions, transactions, payments, and platform use remain allowed — provided they do not meet the economic equivalence standard. The SEC, CFTC, and US Treasury are jointly directed to define permissible rewards and draft anti-evasion rules within twelve months of enactment.
The Industry Reaction
The crypto industry's opening read was cautious. The limits on tying rewards to balances or transaction amounts were also flagged as potential obstacles to designing workable incentive structures.
The divide in early reactions maps directly onto the commercial stakes.
What Happens Next
The draft text is not final. Bank representatives reviewing the same language on Tuesday could push for tighter restrictions, potentially reopening language that the crypto side has already flagged as too narrow. The Senate Banking Committee markup, if it holds to April, remains the first of five sequential steps before the bill can reach the President's desk.
As FinTech Weekly has tracked throughout the CLARITY Act's Senate passage, the remaining unresolved issues extend beyond stablecoin yield. DeFi provisions, ethics language barring senior officials from personally profiting from crypto assets, and a potential attachment of community bank deregulation to the bill all remain open.
The yield text is the most important development in the CLARITY Act since January. It is not the last.
Editor's note: We are committed to accuracy. If you spot an error or have additional information about the CLARITY Act's stablecoin yield provisions, please email [email protected].
