U.S. Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) released compromise legislative text Friday resolving the stablecoin yield dispute that had stalled the Digital Asset Market Clarity Act since January.
The new language prohibits crypto firms from offering yield on stablecoin balances that is “functionally or economically equivalent” to a bank deposit, while preserving room for reward programs structured around transaction activity rather than passive holding.
What the compromise allows
The distinction matters because it lets firms like Coinbase and Circle continue offering stablecoin incentive programs while addressing the banking industry’s core objection: that yield-bearing stablecoins could pull deposits away from traditional banks.
The deal includes three categories of exceptions that allow payments based on balances, covering liquidity provision for market making, posting collateral for trading, and staking.
Coinbase CEO Brian Armstrong, whose company had blocked the bill in January, responded to the compromise with a simple endorsement:
“Mark it up.”
Circle Chief Strategy Officer Dante Disparte said the deal “marks meaningful progress,” while Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, called the moment “go time.”
Industry reaction and remaining concerns
Not everyone was fully satisfied. Ji Kim, CEO of the Crypto Council for Innovation, said the text “goes very far beyond” the GENIUS Act’s restrictions but still urged the committee to advance the bill, reflecting a broader industry calculation that imperfect legislation now beats no legislation at all.
Treasury Secretary Scott Bessent had publicly pressured holdouts last month, labeling crypto executives who resisted the bill “nihilists” in a Wall Street Journal op-ed.
Timeline and odds
Senator Cynthia Lummis, who chairs the Banking Subcommittee on Digital Assets, previously committed to a May markup and warned that failure to pass the bill this year would push the next opportunity to 2030.
The Senate Banking Committee’s earliest available markup window is the week of May 11, with Memorial Day recess starting May 21.
Galaxy Digital pegged the odds of the CLARITY Act becoming law in 2026 at roughly 50-50 in an April research note, citing:
“the sheer number of unresolved questions that must be settled in sequence under severe time pressure.”
Polymarket odds sat at around 48% as of late last week.
