Senators Agree Stablecoin Yield Deal; Coinbase Backs Markup

Senators struck an agreement Friday to prohibit interest-equivalent yields on stablecoins while allowing limited rewards tied to specific transactions. Coinbase CEO Brian Armstrong signaled support for a Senate Banking Committee markup of the Clarity Act.

The draft would bar payments that are “economically or functionally equivalent” to interest on bank deposits. It would allow “rewards or incentives” for bona fide activities such as transactions, payments, transfers, remittances and providing liquidity in decentralized finance protocols. The text gives federal financial regulators one year to issue rules that define when a reward becomes an unlawful interest-like payment.

Senate Banking Committee Chair Tim Scott led negotiations on market-structure rules for digital assets and signaled the committee is moving toward a bipartisan markup. A markup could advance the bill to the Senate floor; lawmakers will still need to reconcile the Senate draft with a House-passed version before any final law can be enacted.

Armstrong wrote “Mark it up,” indicating support for advancing the measure to a committee vote. He had withdrawn his backing in January over concerns about how stablecoins were treated and other provisions, a move that delayed an earlier planned markup.

Reactions from the crypto sector were mixed. Investor Nic Carter wrote “The banks won.” Scott Johnsson, general counsel at Van Buren Capital, described the deal as acceptable and added, “may not feel like it, but it is.” Summer Mersinger, chief executive of the Blockchain Association, issued a statement saying resolving the yield question “clears the path to a Senate Banking Committee markup” and urged the committee to proceed without delay.

The Clarity Act aims to extend limits on stablecoin yield beyond last year’s GENIUS Act, which banned stablecoin issuers from paying interest on customers’ digital dollars. Banks argued that high-yield stablecoins could draw depositors away from traditional checking and savings accounts, and some lawmakers sought to apply restrictions to exchanges and lending platforms.

Negotiators hope to hold a Banking Committee markup as soon as this month, but the Senate must reconcile its text with the House version. The legislative calendar tightens as the 2026 election season ramps up, which could affect timing.

If the Clarity Act advances, the rulemaking process and any final reconciliations will determine how much flexibility digital-asset firms have to offer incentives without running afoul of the ban on interest-equivalent payments.