U.S. Senators Reach Deal on Stablecoin Yield in Crypto Clarity Act

TLDR

• Senators Thom Tillis (R) and Angela Alsobrooks (D) have reached an “agreement in principle” on stablecoin yield rules inside the Digital Asset Market Clarity Act.
• The deal would ban yield payments on passive stablecoin balances, addressing banking industry fears about deposit flight.
• Industry stakeholders have heard a deal exists but have not yet seen the legislative text, which was not expected to circulate before Monday.
• The White House was reviewing updated bill text on Thursday; it did not respond to comment requests on the Friday development.
• A Senate Banking Committee hearing is expected in late April, with advocates hoping for a full resolution by May.

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Two U.S. senators have struck a tentative deal on one of the biggest sticking points in the Digital Asset Market Clarity Act, potentially moving the crypto legislation closer to a Senate vote.

Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, both members of the Senate Banking Committee, confirmed they reached an “agreement in principle” on how to handle stablecoin yield. The news was first reported by Politico on Friday.

The deal centers on whether stablecoin issuers can share interest-like returns with token holders. Under the proposed compromise, yield payments on passive stablecoin balances would be prohibited.

Her communications director, Connor Lounsbury, told CoinDesk the senators plan to consult with industry stakeholders to get feedback before anything is finalized.

Why Banks Pushed Back

Banks had raised concerns that yield-bearing stablecoins would act like bank deposits but with higher returns, pulling money out of the traditional banking system.

Current bank deposit yields sit well below 1%. A regulated stablecoin offering competitive returns could attract consumers away from traditional accounts, threatening the funding banks use for lending.

Patrick Witt, executive director of the White House Council of Advisors for Digital Assets, pushed back on those fears, saying a wave of fresh capital would likely enter U.S. banks if dollar-pegged yield-bearing stablecoins were legalized and properly regulated.

The Clarity Act stalled earlier in January after major players, including crypto exchange Coinbase, raised concerns about the stablecoin yield rules. That pause slowed what had been expected to be straightforward progress following the passage of the GENIUS stablecoin framework.

What Still Needs to Be Resolved

The yield compromise does not close out all remaining issues in the bill.

Lounsbury noted that ethics provisions and illicit finance rules still need to be settled before the bill can win a wide bipartisan vote in the Banking Committee.

Some Democrats have also raised concerns about the bill’s treatment of decentralized finance, or DeFi, citing illicit finance risks.

Senator Cynthia Lummis, who chairs the Banking Committee’s crypto subcommittee, said earlier this week she expects a hearing in the second half of April.

Advocates have been aiming for a May resolution. However, Senate floor time faces competition from unrelated priorities, including a Republican voter-ID bill and debate over the war in Iran.

Industry insiders told CoinDesk they are aware of the new compromise but have not yet seen the agreed legislative text, which was not expected to be shared with stakeholders before Monday.

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