Coinbase backs Senate stablecoin yield deal; Clarity Act odds up

Senators reached an agreement to bar payments tied to stablecoins that are “economically or functionally equivalent” to interest on bank deposits while permitting certain activity-based rewards. The draft text gives federal regulators one year to issue rules defining when a payment counts as banned interest and when it qualifies as a permitted incentive.

The draft allows firms to offer “rewards or incentives” for bona fide activities such as transactions, payments, transfers, remittances and providing liquidity to decentralized finance protocols. It prohibits passive yield that mimics interest on bank deposits. The language follows a prior compromise intended to close ambiguity left by last year’s stablecoin law, the GENIUS Act.

Coinbase signaled support when CEO Brian Armstrong posted a brief call to “Mark it up,” urging the Senate Banking Committee to hold a markup session that could move the measure forward. Armstrong had withdrawn support in January over concerns about the bill’s treatment of stablecoins, prompting negotiators to reopen talks and delaying a planned markup. Senate Banking Committee Chair Tim Scott indicated the committee is working toward a bipartisan markup and suggested a vote could happen as soon as this month.

Reaction in the crypto industry was mixed. Investor Nic Carter wrote, “The banks won.” Attorney Scott Johnsson wrote that the deal “is fine” and “may not feel like it, but it is.” Blockchain Association CEO Summer Mersinger stated that resolving the stablecoin yield question would allow market structure legislation to advance and urged the committee to act quickly. Following Coinbase’s endorsement, betting market odds on Polymarket for the Clarity Act’s passage in 2026 rose from 46% to 64%.

If the Senate advances the bill, lawmakers will need to reconcile it with a stablecoin measure the House passed nearly a year ago. Congressional work on the legislation could slow as the 2024–2026 election cycle intensifies. Banks lobbied to prevent third-party crypto platforms from offering interest-like payments that could draw deposits away from traditional accounts. If enacted, regulators will have a year to define the boundary between permitted incentives and banned interest, a determination that will affect how exchanges, wallets and DeFi platforms structure rewards programs.