Senate Stablecoin Deal Bans Yield but Hands 3 Agencies Power to Define “Rewards”

The Senate’s latest CLARITY Act compromise reportedly bans platforms from offering yield on stablecoin holdings while tasking three federal agencies with defining what activity-based rewards remain legal.

Eleanor Terrett revealed the details after reportedly obtaining an internal stakeholder email shared following closed-door Capitol Hill reviews by crypto industry leaders.

What the Alleged Draft Text Reveals

The draft emerged from weeks of negotiations between Senators Thom Tillis and Angela Alsobrooks, with bank representatives set to review the same text on March 25.

The proposal bars digital asset service providers, including exchanges and brokers, from offering yield “directly or indirectly” on stablecoin balances. It also prohibits anything deemed “economically or functionally equivalent” to interest.

However, activity-based rewards tied to loyalty programs, promotions, or subscriptions would survive, provided they do not trigger the equivalence standard.

The SEC, CFTC, and US Treasury must jointly define permissible rewards and draft anti-evasion rules within 12 months.

Vague Language Draws Concern

However, certain elements in the text present a “departure” from prior White House discussions.

The “economic equivalence” standard could be interpreted more restrictively by future regulators, and the limits on tying rewards to balances make it difficult to structure incentives.

“Overall, this is a more narrow and restrictive approach toward crypto,” Terrett noted.

However, this outcome appears largely in line with expectations and broader than the original Tillis-Alsobrooks proposal, which would have imposed tighter restrictions on crypto platforms.

The CLARITY Act passed the House 294-134 in July 2025 and cleared the Senate Agriculture Committee in January 2026. The Senate Banking Committee markup is targeted for late April.

Senator Bernie Moreno has warned that if the bill does not reach the Senate floor by May, digital asset legislation may stall until after the midterm elections.

Bloomberg Intelligence analysts estimate stablecoin revenue made up roughly 19% of Coinbase’s total 2025 revenue, making the outcome of this text financially material to publicly traded crypto firms.

Bank feedback on March 25 could shift the final language before the committee vote.

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