Stablecoin regulation breakthrough: 99% CLARITY Act interest deal

U.S. Senator Cynthia Lummis says lawmakers are near 99% agreement on stablecoin regulation within the CLARITY Act, focused on stablecoin interest provisions. The key question is how stablecoin issuers handle interest earned from reserve assets—whether issuers can distribute earnings to token holders or must redirect it to other purposes. Lummis highlighted the breakthrough during a Republican meeting on March 24, describing it as highly productive. The CLARITY Act is positioned as a comprehensive federal framework for digital asset market structure, updating rules around market structure definitions, consumer protection, stablecoin standards (including reserve and redemption guarantees), and interagency coordination across the SEC, CFTC, Treasury, and the Federal Reserve. Analysts note stablecoin interest provisions matter because stablecoins—typically pegged to the U.S. dollar—have grown to more than $150 billion in global market value. Earlier legislative attempts stalled, including the 2022 Stablecoin Innovation and Protection Act and a 2023 digital asset market structure draft. Next steps: committee markup is expected within 30–45 days, with potential Senate floor consideration in Q2 2025 if approvals move smoothly, followed by House coordination and an executive review. Market context: major issuers like Circle (USDC) and Tether (USDT) want clear federal standards to replace a patchwork of state rules, while consumer groups remain split on how strict stablecoin functionality and disclosures should be. This near-unanimous stablecoin regulation agreement improves odds of substantive legislation advancing, but it is not a guarantee of final passage.