Senate Strikes Compromise on CLARITY Act: Stablecoin Rewards Allowed for Active Users, Not Holders

Washington, D.C. – The U.S. Senate Banking Committee has reached a pivotal bipartisan agreement in the revised Digital Asset Market Clarity Act (CLARITY Act), greenlighting crypto firms to offer stablecoin rewards tied to genuine activity while explicitly banning passive yields resembling bank deposit interest—a move balancing innovation with protections for traditional banking.

Unveiled May 2, 2026, by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), the draft—Section 404(b)—prohibits digital asset providers from paying “any form of interest or yield… solely in connection with the holding of a payment stablecoin” or in ways “economically or functionally equivalent” to interest-bearing deposits. This shields depository institutions, which regulators warn could lose up to $6.6 trillion in deposits to unregulated stablecoin incentives.

Activity-Based Rewards Get the Green Light

The compromise carves out exemptions for “bona fide activities” and “activity-based rewards,” preserving incentives for real usage without securities or banking classification:

• Payments, transfers, remittances, and settlements.
• Wallet, account, platform, or blockchain network benefits.
• Loyalty programs, promotions, subscriptions, and rebates.
• Crypto-native participation: Liquidity/collateral provision, governance, validation, staking, or ecosystem activity.

Coinbase Chief Policy Officer Faryar Shirzad praised the outcome as protecting “Americans’ ability to earn rewards based on real usage of crypto platforms,” calling it a win for innovation and competitiveness.

Banking Safeguards and Anti-Evasion Measures

Banking lobbies like the American Bankers Association and America’s Credit Unions secured the passive yield ban, framing rewards as a “loophole” around the GENIUS Act’s interest prohibition. The text includes anti-circumvention provisions to prevent affiliates or indirect schemes from bypassing restrictions.

Treasury and CFTC must issue clarifying rules within one year of passage.

Path to Passage Accelerates

Chairman Tim Scott (R-SC) touted the framework for delivering “clear rules… for families and small businesses.” With the stablecoin issue settled, committee markup targets mid-May, boosting Polymarket odds of 2026 passage to 55%—up 9 points. The bill aligns House-passed H.R. 3633 provisions, including CFTC spot market oversight and DeFi safe harbors, potentially reaching the President’s desk by summer. 

As stablecoin adoption surges, the CLARITY Act positions U.S. crypto markets for regulated growth, favoring active ecosystems over idle speculation.

Disclaimers: All contents in this article are for informational purposes only and does not constitute any form of advice.Third-party websites and their content are provided for informational purposes and user convenience only. Rola News does not control, endorse, or assume responsibility for any Third-party websites, including their content, accuracy, privacy practices, or any subsequent changes or updates made to them. This article is AI-assisted and has been reviewed by our editorial team.