Stablecoin Yield Compromise: Crypto, Banks, and White House Near Deal

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Clarity Act sprint raises hopes for stablecoin yield compromise

Negotiations are ongoing between cryptocurrency advocates, banks, and the White House to reach an agreement on how stablecoins earn returns. If successful, this could move forward the Clarity Act and establish guidelines for rewards offered on digital dollar transactions in the United States.

Summary

  • Crypto and banking lobbyists have reopened talks on stablecoin yields under the Clarity Act, with insiders signaling a possible breakthrough this month.
  • A forthcoming White House report is expected to lean pro-crypto on stablecoin yields, even as banks warn of deposit flight and push to curb passive rewards.
  • If the yield dispute clears, lawmakers are set to pivot the Clarity Act fight toward DeFi, tokenization, and token classification later this year.

After a long debate, U.S. cryptocurrency companies and banks are nearing a resolution on how to regulate the interest earned on stablecoins. Discussions are currently underway in Washington around a revised version of the Digital Asset Market Clarity Act. According to the Crypto In America newsletter, negotiators are actively working towards a compromise, and sources indicate progress is being made. Recent estimates suggest the bill now has around a 64% chance of becoming law this year, a significant increase from February.

Initial proposals from Senators Thom Tillis and Angela Alsobrooks faced criticism from major companies like Coinbase and Stripe, who warned that completely prohibiting earnings from stablecoins would significantly reduce their income and stifle new developments. Paul Grewal, Coinbase’s chief legal officer, recently stated a compromise on these earnings is near, though a draft from March 23rd still “bans passive yield on stablecoin balances directly or indirectly and permits only narrowly defined activity‑based rewards.” Coinbase CEO Brian Armstrong claims large banks are hindering President Trump’s crypto plans by supporting language that would eliminate the 4–5% returns on stablecoins, which currently generate an estimated $1.35 billion in annual revenue for the exchange. Armstrong previously explained that these payouts simply reflect returns already required by the 2025 GENIUS Act, which ensures payment stablecoins are fully backed by cash or short-term U.S. government debt.

White House signals, banking pushback

A new White House report on stablecoin yields is expected to find that banks shouldn’t worry about these offerings as competition. According to Patrick Witt, a crypto advisor to the White House, rewards offered on stablecoins fully backed by assets aren’t a threat to traditional banking. He sees an opportunity for both stablecoins and banks to operate successfully alongside each other. However, banking industry groups disagree. Community banks have cautioned Congress that these yield-bearing stablecoins could draw “billions” away from insured accounts, and some large financial institutions believe they act like unofficial deposits that could potentially remove up to $500 billion from the financial system by 2028.

Once the issue of yield is settled in committee later this month, the debate around the Clarity Act will likely shift to rules for decentralized finance (DeFi), how digital assets are treated legally, and whether certain tokens should be classified as securities or commodities – topics we’ve covered previously. With stablecoins like USD Coin, currently a major player in both payments and crypto investing with a market value of over $70 billion, the Clarity Act’s progress through the Senate Banking Committee will determine how U.S. investors can earn returns on these “digital dollars” while still staying within the traditional banking system.

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2026-04-06 17:41