The Senate Banking Committee released a draft of the CLARITY Act on Friday, moving the bill toward a committee markup that could come as early as this week. The legislation would bar crypto firms from paying interest or yield on payment stablecoins — but it carves out rewards that aren't functionally equivalent to bank deposit interest. That distinction has both the crypto industry and traditional banks digging in for a fight.
What the bill says about yield
The draft targets payment stablecoins specifically. Issuers wouldn't be allowed to pay interest or yield on those tokens, a provision that many crypto companies see as designed to protect banks' deposit base. But the bill leaves room for rewards that don't mirror how banks pay interest — a nuance that banks worry could be exploited. A Senate Banking staffer put it bluntly: 'Time for everyone to move on from yield. Banks should not turn a modest win into a loss.'
Industry and bank reactions
The crypto industry views the draft as tilted in favor of banks, which already issue stablecoins under state trust charters. Banks, meanwhile, fear the reward carve-out lets crypto firms keep offering yield-like products through workarounds. Neither side is happy, which makes the upcoming markup politically delicate.
Timeline and next steps
The committee markup could be announced this week and then held during the week of May 11 or May 18 — before the Memorial Day recess. That gives lawmakers roughly two weeks to get bipartisan support locked in. Without it, the CLARITY Act stalls. The next two weeks are considered critical.
DeFi and ethics provisions still in flux
Several pieces are still being finalized. DeFi-related provisions from the Blockchain Regulatory Certainty Act and protections for software developers are expected to be wrapped up this week. Ethics negotiations, however, are ongoing and may continue after the CLARITY Act clears committee. That leaves the final shape of the bill uncertain until the last minute.
