Coinbase Confirms Stablecoin Yield Deal, Clearing Path for CLARITY Act

The path for the most significant U.S. crypto market structure legislation to advance in the Senate appears to finally be clear. On Friday, Coinbase announced that a critical bipartisan deal has been reached regarding the stablecoin yield provisions of the CLARITY Act, effectively breaking a fierce standoff between the digital asset sector and traditional banks.

The compromise, finalized by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), resolves a dispute that had pitted the crypto industry against the banking lobby since late 2025. Banks had aggressively lobbied for a total ban on stablecoin rewards, arguing that yield-bearing stablecoins could trigger deposit flight and undermine their ability to fund lending. Coinbase and other crypto firms pushed to preserve the right to offer rewards to users.

The resulting language includes a broad prohibition on rewards offered “in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.” However, it preserves activity-based rewards tied to real platform usage — payments, transfers, and other on-chain activity.

“In the end, the banks were able to get more restrictions on rewards, but we protected what matters — the ability for Americans to earn rewards, based on real usage of crypto platforms and networks,” Coinbase Chief Policy Officer Faryar Shirzad said on X.

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The text also directs regulators to propose a new series of stablecoin regulations, including a new disclosure regime and a list of permissible reward activities, according to Punchbowl News.

Why the stakes are so high

The stablecoin yield dispute was the single largest obstacle to the CLARITY Act reaching committee markup. A January markup was pulled at the last minute after Coinbase withdrew its support over the proposed restrictions. Coinbase reversed course in April and backed the bill, but the yield language remained unresolved. For Coinbase, the stakes are material: stablecoin income reached $1.35 billion in 2025, roughly 20% of total net revenue.

Shirzad framed the compromise as both a consumer and national security win in his full X post. “We also ensured the US can be at the forefront of the financial system, which in this competitive geopolitical era is paramount. That’s important for innovation, consumers, and America’s national security,” he wrote. He added that with the yield dispute resolved, the focus should now shift to the broader bill, noting that “lots of progress has been made in other areas like token classification, DeFi, and tokenization.”

Coinbase CEO Brian Armstrong responded succinctly: “Mark it up.”

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The banking lobby’s core argument, that stablecoin rewards would trigger deposit flight, has also been undercut by the White House’s own Council of Economic Advisers, which published an academic review finding no evidence that stablecoin rewards cause deposit flight from traditional banks.

Remaining hurdles and timelines

The yield compromise clears one of the last major obstacles but does not resolve the bill entirely. Senator Tillis has separately demanded an ethics provision restricting White House officials from promoting or issuing digital assets, aimed at the Trump family’s ventures including World Liberty Financial and USD1. A law enforcement provision protecting non-custodial developers has also drawn objections, though Senator Lummis dismissed the issue as, “This isn’t a big new hurdle.”

Lummis has targeted a May markup for the Senate Banking Committee, telling the Bitcoin 2026 conference last week that the bill is “almost 99% sorted out.” Galaxy Digital’s head of firmwide research Alex Thorn said the release of the yield text “suggests that Senate Banking will schedule markup imminently, as soon as the week of May 11.” Senator Bernie Moreno has separately said he anticipates the CLARITY Act to “get done” by the end of May. However, Thorn warned that he expects “the banks to increase their opposition efforts.”

If the Banking Committee advances the bill, it would still require a 60-vote Senate floor vote, reconciliation with the Agriculture Committee and House-passed versions, and a presidential signature.

Also Read: Sen. Bernie Moreno Sets May Deadline for CLARITY Act, Calls Bank Pushback “Noise”