Senators Pact on Stablecoin Yield; Coinbase Backs Clarity Act

Senators reached an agreement Friday to prohibit payments on stablecoins that are “economically or functionally equivalent” to interest on bank deposits. The draft allows “rewards or incentives” tied to bona fide activities such as transactions, payments, transfers, remittances and providing liquidity in decentralized finance protocols. It directs federal regulators to issue rules within one year to clarify when a payment crosses the line into being equivalent to bank interest.

The text follows earlier legislation that barred stablecoin issuers from paying yield directly to customers and addresses whether third-party platforms, including exchanges, could offer similar yields through intermediaries. The Clarity Act’s language extends the prohibition beyond direct issuer payments to reduce potential circumvention.

Coinbase CEO Brian Armstrong withdrew support for an earlier draft in January, prompting a postponement of the Senate Banking Committee markup while negotiators revised the bill. On Friday he wrote “Mark it up,” signaling renewed backing for advancing the measure. Market prediction estimates of the bill’s chances of passage rose from 46% to 64% after his endorsement.

Reaction across the crypto sector varied. Investor Nic Carter wrote “The banks won.” Scott Johnsson, general counsel at Van Buren Capital, wrote “This is fine. It may not feel like it, but it is.” In a statement, Blockchain Association CEO Summer Mersinger wrote that resolving the yield question “clears the path to a Senate Banking Committee markup” and urged the committee to move forward quickly.

Senate Banking Committee Chair Tim Scott delayed the earlier markup after Armstrong’s January objections and later noted negotiators were revising the text. Scott has indicated the committee is working toward a bipartisan markup in May. If the Senate approves its version, lawmakers will need to reconcile it with a House bill passed nearly a year ago before a final law can be enacted.

Timing risks remain: legislative activity typically slows as election season approaches, and the one-year rulemaking window would leave federal agencies to define many practical details about which stablecoin rewards are permissible.

The draft draws a distinction between passive yield, framed as equivalent to bank interest, and active, transaction-related incentives. Exchanges, decentralized platforms and other market participants will need to assess whether existing products fit the permitted reward structures or require adjustments.

For now, the agreement creates a path to a committee markup that could advance the Clarity Act, but it does not guarantee final passage.