Senate negotiators released new legislative text Friday that draws a firm line between crypto reward programs and bank deposit interest, permitting activity-based stablecoin yields while banning payments made simply for holding a stablecoin balance. The supporting evidence appears in the cited X post.
The proposed section is part of the Digital Asset Market Clarity Act, a compromise worked out by Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) after months of talks involving the White House and both the crypto and banking industries.
The text states that no covered party may “directly or indirectly, pay any form of interest on yield” to a holder solely for holding payment stablecoins or on a stablecoin balance in a manner that replicates the economic function of a bank deposit.
The provision defends the restriction by asserting that depository institutions provide services “integral to the strength of the American economy” and that stablecoin issuers offering similar services “may inhibit” those institutions.
Coinbase Calls for Immediate Senate Markup
Coinbase sat at the center of negotiations and faced the most direct commercial exposure to any restrictions on stablecoin rewards. Chief Executive Brian Armstrong responded to the released text with a two-word directive, writing “Mark it up” on X, signaling the company’s readiness to advance the bill to a formal Senate Banking Committee vote.
Coinbase Chief Legal Officer Paul Grewal offered a more detailed reading in a separate X post, saying the language “preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said they wanted.” Grewal added that Coinbase is “focused on getting a bill done” and considers the language sufficient to remove stablecoin yield from the list of unresolved objections.
What the Compromise Actually Permits
The distinction embedded in the text is between passive yield, paid simply because a user holds a stablecoin, and rewards generated through verified activity such as transactions, lending functions, or protocol participation.
The former is banned; the latter is treated as a “bona fide” transaction and is explicitly allowed under the compromise language.
That framing matters because it preserves revenue models for exchanges and protocols that tie incentives to user behavior rather than to a static balance.
It also gives the banking sector the protective language it sought, framing stablecoin reserve yield as a regulated-deposit equivalent that issuers are not licensed to provide.
With the stablecoin yield dispute now addressed in writing, observers expect no remaining procedural barrier to a Senate Banking Committee markup, the formal committee vote that would move the Clarity Act closer to a full Senate floor vote.
Several other negotiating points have not yet been publicly resolved, and those open items could still affect timing. Even so, the release of agreed text on one of the most contentious provisions is a concrete signal that the bill is advancing rather than stalling.
Not Financial Advice: This article is for informational purposes only. Crypto investments are highly volatile. Always do your own research.
