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US Senators Release CLARITY Act Deal to Bar Interest on Passive Stablecoin Holdings

Source

Doohyun Hwang

Summary

The U.S. Senate released a bipartisan compromise that would ban interest payments on the simple holding of stablecoins.
The proposal says stablecoin issuers would be fully barred from offering returns and interest based solely on an investor's passive ownership of the asset.
The crypto industry said the release of the compromise is a green light for the bill's passage and called for a swift committee vote to support broader innovation across the digital-asset ecosystem.

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A bipartisan group of U.S. senators has released compromise language that would bar interest payments on passive stablecoin holdings.

CoinDesk reported on May 1 that Senators Thom Tillis and Angela Alsobrooks published the final text of an agreement on stablecoin interest payments, one of the main sticking points in the CLARITY Act, a bill on crypto market structure.

The central provision would block stablecoin issuers from offering returns solely because an investor holds the asset.

Under the agreement, issuers would be prohibited from paying customers interest in any form, including cash or tokens. It also bans loyalty programs that are economically or functionally equivalent to interest-bearing bank deposits. The measure is meant to protect the role of existing depository institutions in the U.S. economy and prevent stablecoins from competing directly with core banking products.

The agreement makes an exception for incentives similar to credit-card points or cashback. Legitimate rewards programs tied to actual activity or real transactions, rather than interest payments, would fall outside the restriction.

The crypto industry welcomed the release of the compromise, calling it a positive signal for the bill's passage.

Paul Grewal, Coinbase's chief legal officer, wrote on X that months of negotiations with the White House and the Senate showed the risks raised around stablecoins had been overstated. He said the outcome preserved rewards based on actual platform participation, in line with what the banking industry had sought.

He added that Coinbase had maintained the issue did not require a legislative fix. The company is now focused on advancing the bill and is satisfied that the agreement does not provide a basis for opposing its passage.

Cody Carbone, chief executive officer of the Digital Chamber, said the release of the stablecoin yield provision was important progress because it resolved one of the final issues blocking a committee vote. He called for a swift committee vote to support innovation across the digital-asset ecosystem.