CLARITY Act stablecoin rules: banks push tighter yield limits, Senate markup set for May 14

Ahead of a Senate Banking Committee markup on May 14, U.S. banking groups are lobbying for tighter stablecoin regulation under the CLARITY Act. Bloomberg reports that advocacy groups including the American Bankers Association and Consumer Bankers Association want to block stablecoin issuers from offering incentives tied to holding or using stablecoins. Lawmakers had previously discussed a compromise that could allow incentives for active stablecoin use, but banks are objecting to the latest wording. Their concern is that exceptions could let issuers effectively work around the intended incentive ban, while encouraging users to hold and grow stablecoin balances rather than keep money in traditional bank deposits. Support for the CLARITY Act still appears to be holding. Coinbase executives—Faryar Shirzad (policy) and Paul Grewal (legal)—have publicly backed the process. Polymarket odds are reportedly around 75% for approval nearing. Key sponsors include Sen. Angela Alsobrooks and Sen. Thom Tillis, whose negotiated version drew bank criticism, while Sen. Tim Scott and the Senate Banking Committee are moving the bill toward the May 14 markup. For crypto traders, the core takeaway is that the CLARITY Act process remains live. This could shift near-term expectations for U.S. stablecoin issuance economics and regulatory-risk pricing, even as banks seek to limit yield-like incentives.