Coinbase Backs Stablecoin Yield Deal, Clarity Act Odds Rise

Senators reached a deal on Friday to limit payments that resemble interest on stablecoins while permitting rewards tied to specific activities. Coinbase CEO Brian Armstrong signaled support by writing “Mark it up,” and Polymarket odds for the Clarity Act passing in 2026 rose from 46% to 64%.

The draft text would ban payments that are “economically or functionally equivalent” to interest on bank deposits. It would allow “rewards or incentives” linked to bona fide activities such as transactions, payments, transfers, remittances and providing liquidity. The draft gives U.S. financial regulators one year to publish rules defining when a reward qualifies as an allowed incentive rather than a prohibited yield.

The proposal follows last year’s GENIUS Act, which banned stablecoin issuers from paying yield on customers’ digital dollars but left unclear whether third-party platforms such as exchanges could offer interest-like payments. Banks urged lawmakers to close that gap, arguing high-yield stablecoin accounts could draw deposits away from traditional banks.

In January, Armstrong withdrew support for the bill and negotiators returned to the table, prompting Senate Banking Committee Chair Tim Scott to postpone a planned markup. Scott said the committee is “nearing consensus” and working toward a bipartisan markup in May. Industry sources say a committee vote could occur as soon as this month. If the bill advances, the Senate version must be reconciled with a House bill passed last year.

Reactions in the crypto community were mixed. Investor Nic Carter posted, “The banks won.” Scott Johnsson, general counsel at Van Buren Capital, wrote, “This is fine.” Blockchain Association CEO Summer Mersinger said resolving the yield question clears the path to a Senate Banking Committee markup and urged lawmakers to move quickly.

If the Clarity Act clears committee, lawmakers will still face scheduling constraints as the 2026 election season approaches and must harmonize Senate and House language. The draft assigns regulators a one-year timeline to set technical limits on what counts as an allowed reward.