Coinbase backing boosts Clarity Act odds after stablecoin deal

Senators reached a Friday agreement to bar payments on stablecoins that are “economically or functionally equivalent” to interest paid on bank deposits while allowing specified rewards tied to transactions and services. The draft directs federal regulators to publish rules within one year to define when a payment becomes prohibited interest-like yield. The announcement pushed Polymarket odds that the Clarity Act will pass in 2026 from 46% to 64%.

The text preserves a carve-out for “rewards or incentives” tied to bona fide activities such as payments, transfers, remittances, transactions and providing liquidity in decentralized finance protocols, provided those payments are not functionally the same as bank interest. The language follows last year’s GENIUS Act, which banned stablecoin issuers from paying yield but left open whether third-party platforms like exchanges could offer interest-like products.

Coinbase CEO Brian Armstrong, who withdrew support and delayed a markup in January over concerns about the bill’s treatment of stablecoins, posted “Mark it up” on social media, signaling renewed backing. His post coincided with the jump in market odds and increased the likelihood of a committee vote in the near term.

Reactions among industry figures varied. Investor Nic Carter wrote, “The banks won.” Attorney Scott Johnsson described the compromise as acceptable, writing, “This is fine. It may not feel like it, but it is.” Blockchain Association CEO Summer Mersinger released a statement welcoming the resolution and urged the committee to move quickly.

Senate Banking Committee Chair Tim Scott wrote that the panel is making progress toward a bipartisan markup and is “nearing consensus” on digital asset market legislation. If the committee advances the measure, the Senate would still need to reconcile its version with a House bill passed nearly a year ago. The broader legislative calendar could slow with the approach of the election season.

The draft gives regulators one year to issue rules clarifying when a payment crosses the line into prohibited interest-like yield. Industry participants have flagged that guidance as important for product design and compliance.

If the Clarity Act clears committee and differences with the House are resolved, the bill would establish a national framework for stablecoin market structure and define permissible designs for rewards and yield products. Regulatory rules issued under the law will determine how the provisions are applied in practice and which offerings remain available in the U.S. crypto market.