Coinbase deal revives CLARITY Act ahead of Senate vote

Coinbase’s agreement with senators has revived progress on the CLARITY Act after negotiators reached a compromise on stablecoin yield rewards. The deal ends a standoff that had stalled a Senate Banking Committee markup.

Under the compromise negotiated by Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) on March 20, platforms would be barred from paying passive interest on idle stablecoin balances. Platforms may offer rewards tied to payments, transfers and other platform activity. The stablecoin yield dispute led the committee to pull a planned markup in January.

Coinbase played a prominent role in pushing the bill forward. Chief Legal Officer Paul Grewal described the CLARITY Act as unfinished business after last year’s GENIUS Act established rules for stablecoin issuance. The CLARITY Act aims to draw jurisdictional lines between the Securities and Exchange Commission and the Commodity Futures Trading Commission across digital-asset markets.

Traditional banks lobbied for a full ban on yield-like offerings, arguing such incentives could prompt deposit outflows from the banking system and strain liquidity. Crypto firms argued a total ban would reduce options for consumers and limit competition.

Coinbase chief policy officer Faryar Shirzad wrote on X that negotiators tightened the language while preserving consumer benefits, adding that Americans would keep the ability to earn rewards based on real platform usage. Coinbase initially rejected draft bill language circulated on March 23, citing concerns that the restrictions risked being too broad and could block legitimate consumer benefits. Company officials later resumed talks with lawmakers and banking representatives.

If the Senate Banking Committee schedules a markup, lawmakers must still finalize text and vote-order language, including how activity-based rewards are defined and overseen. The CLARITY Act also includes provisions to allocate regulatory authority between the SEC and CFTC, a point of debate among agencies and industry groups.

Ripple CEO Brad Garlinghouse publicly predicted the bill could pass by the end of May, expecting it to clear the committee, pass the Senate and reach the president before the Memorial Day recess on May 21. Senator Cynthia Lummis wrote that the current window is narrow and called the moment the last chance to pass the CLARITY Act until 2030; Senator Bernie Moreno expressed similar timing concerns.

Supporters contend the bill would provide legal clarity by specifying which regulators oversee different tokens and services. Opponents, including some banks and conservative financial groups, remain wary of any framework that allows reward products tied to token holdings, even if limited to activity-based incentives.

Lawmakers and industry leaders are working to finalize language and secure votes before the Senate recess. The compromise over stablecoin yield is the central issue to advancing the broader CLARITY Act.