- Tillis and Alsobrooks agree on rules banning interest-like stablecoin rewards while allowing activity-based incentives under strict tests.
- Regulators will define compliance standards, disclosures, and permitted reward structures to guide crypto firms and exchanges.
- Deal removes key hurdle ahead of May markup, balancing bank concerns with crypto industry demand for flexible reward models.
Senators. Thom Tillis and Angela Alsobrooks finalized a stablecoin rewards compromise in Washington ahead of a planned May markup of the CLARITY Act. The agreement, reported by Punchbowl News, followed months of negotiations involving lawmakers, the Treasury Department, and industry representatives. It defines how crypto firms can offer rewards while restricting interest-like payments tied to stablecoins.
New Language Sets Limits on Rewards
According to Punchbowl News, the agreement introduces a broad restriction on stablecoin rewards. It bars payments that are “economically or functionally equivalent” to interest on bank deposits.
However, the text allows certain rewards tied to platform activity. Companies must meet the equivalence test before offering such incentives. Notably, the provision applies to covered parties, including exchanges and affiliates distributing rewards.
It directly addresses practices not explicitly covered under earlier law. This shift builds on the GENIUS Act, signed by President Donald Trump on July 18, 2025. That law prohibited issuer interest payments but left gaps in secondary market activity.
Regulators Tasked With New Framework
Alongside the restrictions, the agreement directs regulators to draft additional rules. These include a new disclosure regime and a defined list of permissible reward activities. Regulators must clarify how firms demonstrate compliance with the equivalence standard.
This requirement aims to standardize how stablecoin rewards get assessed across platforms. Meanwhile, the compromise removes a key obstacle that delayed broader legislative progress.
Senate Banking Committee Chairman Tim Scott has indicated unified Republican support remains necessary before markup. As a result, attention now shifts toward the full CLARITY Act text, which still includes unresolved provisions.
Industry and Policy Responses Emerge
According to Blockchain Association CEO Summer Mersinger, the agreement clears the path toward a Senate markup. She stated the development brings market structure legislation closer to advancing.
At the same time, Coinbase Chief Policy Officer Faryar Shirzad described the outcome as preserving activity-based rewards. He noted the process involved the White House, Treasury, and Senate negotiators.
Shirzad added that banks secured tighter restrictions, while crypto firms retained user-based reward models. He also pointed to ongoing work around token classification, decentralized finance, and tokenization.
Meanwhile, discussions between banks and crypto firms continue, focusing on stablecoins’ role within the financial system.
