Lawmakers Strike Deal on Stablecoin Yields, Coinbase Says

Lawmakers finalized a compromise on the stablecoin yield provision in the Clarity Act, potentially allowing a long-delayed Senate Banking Committee markup to move forward. Senators Thom Tillis and Angela Alsobrooks agreed on the text late Friday.

The compromise is written into Section 404 of the bill and bars ‘‘covered parties’’ from paying interest or yield to U.S. customers solely for holding stablecoins, or in any form economically or functionally equivalent to interest on a bank deposit. Covered parties are defined as digital asset service providers and their affiliates. Permitted stablecoin issuers and certain registered foreign issuers are excluded.

The ban does not apply to bona fide activity-based or transaction-based rewards and incentives. The Securities and Exchange Commission, the Commodity Futures Trading Commission and the Treasury Secretary are directed to jointly issue rules within one year that list permitted activities. Expected examples include payments, transfers, market-making, staking, governance and loyalty programs. The bill allows permitted rewards to be calculated by reference to a user’s balance, duration or tenure so long as the reward ties to qualifying activity.

The text adds consumer protections and disclosure requirements. Covered parties would be prohibited from representing that stablecoins are investment products, are backed by the full faith and credit of the United States, or are FDIC-insured. The SEC, CFTC and Treasury must issue disclosure rules within a year. The Treasury Department may assess civil monetary penalties of up to $5 million per violation.

The bill requires a two-year review by the Federal Reserve, OCC, FDIC, NCUA and Treasury. That report to Congress must analyze adoption of dollar-denominated stablecoins, effects on Treasury yields, and how compensation paid to U.S. customers affects the volume, stickiness, composition and concentration of bank deposits.

The dispute over yield language had stalled committee action for months. A planned January markup was canceled after Coinbase withdrew support for an earlier draft, and a later draft in March coincided with a sharp drop in Circle’s stock. Coinbase reported $1.35 billion in stablecoin revenue in 2025, much of it tied to rewards-based distribution through its USDC partnership with Circle. The exchange is scheduled to report first-quarter earnings on May 7.

Senate Banking Committee Chair Tim Scott has not set a markup date. If the committee approves the bill, it must be reconciled with a competing Senate Agriculture Committee version and then harmonized with the House-passed Digital Asset Market Clarity Act before reaching the president’s desk. Separate negotiations continue on ethics rules proposed by Senator Tillis and on language addressing decentralized finance and illicit finance controls.

Coinbase reacted to the agreement on social media. Chief Policy Officer Faryar Shirzad posted that the deal preserved Americans’ ability to earn rewards based on real use of crypto platforms and networks. CEO Brian Armstrong posted three words: “Mark it up.”