- Lawmakers agree stablecoins can’t offer interest-like yields but may give usage-based rewards tied to platform activity.
- Banking groups argue the deal still allows bank-like returns and are urging clearer, stricter reward limits.
- The compromise accelerates the CLARITY Act toward a Senate markup despite industry and banking tensions.
Senators Thom Tillis and Angela Alsobrooks confirmed a bipartisan compromise on stablecoin rewards under the CLARITY Act, as reported May 5, following months of negotiations in Washington. The agreement addresses banking concerns over deposit flight while defining how crypto firms can offer incentives. According to statements shared by Eleanor Terrett, the deal is now unlikely to change despite industry feedback.
Lawmakers Define Limits On Stablecoin Rewards
Tillis and Alsobrooks said the compromise prohibits rewards that resemble bank deposit interest. They explained that this directly targets concerns about funds leaving traditional banks.
However, the framework allows crypto firms to offer alternative rewards tied to platform activity. These include transaction-based incentives such as cashback or discounted services.
According to the joint statement, both lawmakers worked with stakeholders for months. They said banks contributed feedback throughout the drafting process.
Notably, the senators described the outcome as a consensus-based product. They added that the agreement supports progress toward passing the CLARITY Act.
Banking Groups Say Proposal Falls Short
However, banking trade groups responded with concerns after the language became public. Organizations including the American Bankers Association and Bank Policy Institute said the proposal does not fully prohibit yield.
They argued that the text still leaves room for functionally similar rewards. According to their statement, clearer restrictions are necessary to prevent deposit outflows.
The groups said they will submit detailed recommendations to lawmakers soon. However, they acknowledged that major revisions appear unlikely at this stage.
A Senate staffer echoed that view, stating it is time to move past the yield debate. The staffer added that banks should not escalate a limited win.
CLARITY Act Moves Closer To Senate Markup
Meanwhile, the compromise moves the CLARITY Act closer to a Senate Banking Committee vote. Lawmakers have debated stablecoin reward structures for nearly three months.
The agreement now defines that stablecoins cannot offer returns on idle balances. Instead, rewards must link directly to usage within platforms.
Coinbase has supported the updated language after earlier concerns about bank influence. Chief Policy Officer Faryar Shirzad said the deal preserves user rewards tied to activity.
Chairman Tim Scott is expected to schedule a markup soon, possibly during the week of May 11.
