Crypto industry backs CLARITY Act yield compromise, pushes Senate Banking for markup

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Crypto industry backs CLARITY Act yield compromise, pushes Senate Banking for markup The agreement necessitates firms restructure reward programs from a "buy and hold" to a "buy and use" model; however, CCI raised concerns over its broad prohibition. What to know: - Senators Thom Tillis and Angela Alsobrooks released a compromise on stablecoin yield in the CLARITY Act, banning yield equivalent to bank deposits but allowing "bona fide activities." - Crypto trade groups, including Coinbase and Circle, immediately backed the deal and urged the Senate Banking Committee to advance the market structure legislation. - The agreement necessitates firms restructure reward programs from a "buy and hold" to a "buy and use" model; however, CCI raised concerns over its broad prohibition. Crypto trade groups called for a markup of key market structure legislation within hours of U.S. Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) releasing a compromise text Friday on stablecoin yield in the Digital Asset Market Clarity Act, the final major sticking point in the bill. The text bars crypto firms from paying interest or yield on stablecoin balances in a manner economically or functionally equivalent to a bank deposit. It carves out rewards programs tied to "bona fide activities or bona fide transactions," and directs Treasury and the CFTC to write rules within a year of enactment. Blockchain Association CEO Summer Mersinger called the deal a step in the right direction. "We commend Senators Tillis and Alsobrooks for their leadership in reaching this agreement," Mersinger said. "Every day without a clear legal framework is an invitation for top-tier talent, capital, and innovative companies to locate elsewhere." The Crypto Council for Innovation endorsed the bill while flagging concerns. Its CEO Ji Hun Kim said the new language extends the prohibition framework well beyond last year's GENIUS Act, which barred only issuers from paying rewards. "CCI has been clear that we disagree with assertions about deposit flight concerns from stablecoin adoption," Kim wrote on X. The text, he said, "goes VERY FAR beyond" the GENIUS Act by applying to all digital asset market participants. Kim urged the committee to advance the bill anyway. "The north star is to ensure that the U.S. can lead on crypto–this is the future. We respectfully ask Senate Banking to move to mark up. The time is now,” he wrote. Circle Chief Strategy Officer Dante Disparte, whose firm issues the USDC and EURC stablecoins, endorsed the deal without qualification. "Today's compromise on stablecoin yield marks meaningful progress in the CLARITY Act negotiations," Disparte said. He pointed to USDC's growth in cross-border payments, capital markets collateral and agentic commerce. "The United States faces a clear choice in digital assets: lead or be led," he said. “Today’s progress is an encouraging signal that the U.S. is choosing to lead.” Coinbase had the most at stake in the negotiations. CEO Brian Armstrong posted "Mark it up" after the text dropped. Chief legal officer Paul Grewal said the language preserves activity-based rewards tied to real participation on crypto platforms, which is what the bank lobby had asked for. The Senate Banking Committee postponed an earlier CLARITY Act markup in January. Other negotiation points remain unresolved, but the yield language has largely been the greatest obstacle. Firms will need to restructure rewards programs from a "buy and hold" model to a "buy and use" one to comply with the transaction caveats. More For You The text released Friday blocks crypto firms from offering stablecoin yield offerings that look like bank deposits, but "bona fide" transactions are allowed. What to know: - Text has emerged revealing the Clarity Act compromise worked out between members of the Senate Banking Committee, which would allow crypto firms to keep pursuing stablecoin reward programs. - As expected, the text prohibits crypto firms from offering yield on stablecoin deposits if that yield is the functional or economic equivalent...

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