Senate Deal Bans Stablecoin Yield, Hands Agencies Power to Define Rewards

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Senate Stablecoin Deal Bans Yield but Hands 3 Agencies Power to Define “Rewards”

The Senate’s new compromise on the CLARITY Act would prevent platforms from paying interest on stablecoin holdings. It also directs three federal agencies to determine which types of rewards based on user activity are still permitted.

Eleanor Terrett reported on details from an internal email after crypto industry leaders met privately with lawmakers on Capitol Hill.

What the Alleged Draft Text Reveals

After weeks of talks, Senators Thom Tillis and Angela Alsobrooks have produced a draft bill. Bank representatives will examine the draft on March 25th.

This new rule stops companies that handle digital assets, like exchanges and brokers, from offering any kind of return – either directly or through other means – on stablecoin holdings. It also prevents them from offering anything that works like interest, even if it’s not technically called interest.

Breaking news: We’re learning more about a new draft law that aims to find common ground on how stablecoins offer rewards and generate yield. Crypto industry leaders have already begun to react to the proposal, which was reviewed today. According to a confidential email I received, the plan would…

— Eleanor Terrett (@EleanorTerrett) March 24, 2026

Rewards based on customer actions, like those from loyalty programs, special offers, or subscriptions, would still be allowed as long as they don’t violate the rules about equal exchange.

Within a year, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the US Treasury Department need to work together to establish clear guidelines for incentives and create rules to prevent people from avoiding them.

Vague Language Draws Concern

However, certain elements in the text present a “departure” from prior White House discussions.

Future regulators might interpret the rules about equivalent value very strictly, and current limits make it hard to design effective rewards programs based on account balances.

“Overall, this is a more narrow and restrictive approach toward crypto,” Terrett noted.

This result is mostly what was anticipated and actually goes further than the initial Tillis-Alsobrooks plan, which aimed for stricter rules for cryptocurrency companies.

The CLARITY Act passed the House of Representatives in July 2025 with a vote of 294 to 134 and then moved forward, gaining approval from the Senate Agriculture Committee in January 2026. The Senate Banking Committee is expected to review and potentially amend the bill in late April.

As an analyst, I’m tracking the potential timeline for digital asset legislation. Senator Bernie Moreno has expressed concern that if the bill isn’t brought up for a vote in the Senate by May, it could be delayed until after the midterm elections. Essentially, time is of the essence for getting this passed this year.

Senator Bernie Moreno is warning that the CLARITY Act will likely be permanently blocked if it isn’t approved by May.

— 🇬🇧 ChartNerd 📊 (@ChartNerdTA) March 19, 2026

Analysts at Bloomberg Intelligence predict that revenue from stablecoins will account for about 19% of Coinbase’s total revenue in 2025. This makes the details of this matter significant for companies in the crypto industry that are publicly traded.

Bank feedback on March 25 could shift the final language before the committee vote.

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2026-03-24 07:42