CLARITY Act yield rules move toward Senate approval, banks push back

The CLARITY Act is nearing progress in the U.S. Senate after Senators Thom Tillis and Angela Alsobrooks agreed a “final” bipartisan compromise, despite opposition from banking groups. Key CLARITY Act changes (Section 404) would stop digital asset service providers from paying U.S. customers interest or passive yield just for holding stablecoins. The draft also bans rewards that are economically comparable to interest on U.S. bank deposits. Instead, the bill would allow “real” rewards when they are tied to actual platform use (such as activity and transfers), not idle balances. Banking groups argue the language is still too loose and cite a study claiming stablecoins that earn yield could reduce consumer, small-business, and farm loans by up to 20%, pushing for tighter restrictions. Tillis and Alsobrooks said they will move forward “respectfully” disagreeing to avoid further delay. Senators Cynthia Lummis and Tim Scott expressed confidence the CLARITY Act could pass before the August recess. Market read-through: Polymarket odds were cited at 70% (up 24% on the week), pointing to rising confidence in a 2026 timeline. For traders, the direction of stablecoin regulation matters for stablecoin APYs, where liquidity parks, and how compliant yield products reprice—though the immediate headline is policy, not a BTC spot driver.