U.S. "CLARITY Act" accelerates progress... Banning stablecoin interest may become a key turning point

The core regulatory bill for the U.S. virtual asset industry, the ‘CLARITY Act,’ is surpassing the stablecoin interest controversy and increasing the likelihood of legislation. Coinbase Chief Legal Officer Faryar Shirzad emphasized when the final text was made public: “It’s time to put an end to CLARITY.”

According to Coinbase, on the 1st (local time), U.S. Senators Tom Tillis and Angela Alsobrooks released the final text, which addresses the longstanding conflict between the banking industry and the virtual asset sector over stablecoin yield payments. The controversy centers on whether paying interest or yields to stablecoin holders is similar to bank deposits, potentially harming the competitiveness of the financial system. Shirzad stated, “Regulation of rewards by banks is stricter, but rewards based on actual virtual asset platforms and network usage are retained.”

‘Prohibit paying interest,’ allow ‘actual activity rewards’

The core of the text is the ‘SEC 404. Prohibition on paying stablecoin interest and yields’ clause. This clause prohibits virtual asset companies from paying ‘any form of interest or yield’ solely because customers hold stablecoins. Its intent is essentially to prevent yield products similar to bank deposits.

However, rewards linked to ‘bona fide activities’ are permitted, leaving room for interpretation. As a result, industry reactions are mixed. Mute Muttaz, CEO of Helius Labs, expressed dissatisfaction, saying, “This is a clear statement that you cannot earn risk-free returns from USD without a bank.” Coinbase CEO Brian Armstrong immediately urged “to push forward as soon as possible” after the related statement was released.

Senate review imminent…expected passage in 2026 rises to 55%

Market assessments suggest that this clarification removes major obstacles to handling the CLARITY Act. On Polymarket, traders currently estimate a 55% chance of the bill being signed into law in 2026, up 9 percentage points from before the announcement.

Alex Thorn, Research Director at Galaxy Digital, interpreted: “The public release of the text means the Senate Banking Committee could set a review schedule as early as the week of May 11.” The review is a process for detailed amendments and examination of the bill’s content. But he added, “Opposition from the banking industry could become even stronger.”

Republican Senator Bernie Moreno expects the CLARITY Act could be completed before the end of May, while Senator Cynthia Lummis previously said, “If not now, then never.” The industry is watching whether this agreement can go beyond just stablecoin debates and accelerate the overall U.S. virtual asset regulatory framework.

Article summary by TokenPost.ai

🔎 Market interpretation The CLARITY Act addresses the previous major controversy over ‘stablecoin interest payments,’ greatly speeding up legislation. The core is a compromise: banning interest solely from holding, allowing rewards based on actual network activity. Market expectations for passage in 2026 are at 55%, with optimism growing.

💡 Strategic highlights Interest-bearing stablecoin models may contract, replaced by a rewards model based on payments and usage. As regulatory clarity increases, U.S.-centered crypto firms may accelerate integration into the regulatory system. Bank opposition remains a variable; further amendments may be considered during legislation.

📘 Terminology explanations CLARITY Act: The core bill clarifying U.S. digital asset regulation Stablecoin: Cryptocurrency pegged to fiat currencies like the USD Markup: Senate committee’s process of amending and reviewing bills Rewards: Incentives generated from platform use, trading, etc.

💡 Frequently Asked Questions (FAQ)

Q. What are the core changes of the CLARITY Act?
A. Paying interest solely for holding stablecoins will be prohibited; only rewards based on actual transactions or network activities are allowed. This is a compromise aimed at easing competition with banks while maintaining cryptocurrency usability.

Q. How does it affect investors or users?
A. Earning interest through simple deposits may be restricted, but rewards from payments, trading, DeFi activities, and other actual usage will be preserved. Therefore, a ‘usage-based yield model’ is expected to become more important.

Q. What are the chances of the bill passing and future prospects?
A. With the major controversy over interest issues clarified, the likelihood of passage has increased. However, opposition from the banking industry remains a variable, and the final form of the bill may change during the legislative process.

TP AI notes:
Using TokenPost.ai’s base language model, the article has been summarized.
Some main points may be omitted or may not fully align with facts.