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- CLARITY Act talks deepen as banks press senators over stablecoin reward rules in Senate.
- Senators weigh DeFi, ethics, and committee differences before further CLARITY Act action.
- Tillis-Alsobrooks plan targets bank-like yield while preserving activity-based rewards.
CLARITY Act talks intensified in the U.S. Senate on Friday as banking groups pressed lawmakers over stablecoin rewards. Senators were also working on ethics language, differences between committee bills, and decentralized finance provisions before a possible formal floor vote.
Journalist Eleanor Terrett said the focus on Capitol Hill had shifted from yield. She pointed to a prospective ethics agreement and unresolved gaps between Banking and Agriculture Committee texts. Her report also identified treatment of DeFi as a remaining issue in the negotiations.
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Stablecoin Yield Debate Shapes CLARITY Act DeFi Rules
Stablecoin rewards remain a central concern for banking organizations. They argue that products resembling deposit interest could draw funds away from banks. Crypto companies have countered that transaction-linked incentives should not be treated the same as bank interest.
In May, the Senate Banking Committee moved the CLARITY Act forward. The text sets federal rules for digital asset oversight by the SEC and CFTC. It still needs alignment with the Senate Agriculture Committee’s proposal before further Senate action.
Senator Cynthia Lummis defended the decentralized finance provisions in a Friday post. She said DeFi is an innovation, not a loophole. Lummis added that the CLARITY Act treats it that way.
Lummis’s remarks showed the policy divide around the CLARITY Act. Crypto advocates want rules that distinguish digital commodities from securities and cover intermediaries. They also oppose treating decentralized protocols as though they operate like centralized financial platforms.
Yield language has received extensive attention during negotiations. Senators Thom Tillis and Angela Alsobrooks released a bipartisan compromise in May. The proposal would bar yield tied solely to holding stablecoins while permitting rewards linked to legitimate activity.
Banks Push Back on Stablecoin Yield Rules
Banking trade groups said the compromise did not fully meet their policy goal. They urged lawmakers to stop bank-like payments of yield and interest on stablecoins. Their position remains tied to concerns about deposit outflows and permitted rewards.
Senator Dave McCormick said negotiations were continuing during a Friday television appearance. He called for rules that clearly protect consumers and keep the industry in the United States. McCormick said he believed lawmakers could complete the work in coming months.
JPMorgan Chase Chief Executive Jamie Dimon has also criticized the current CLARITY Act. He said banks would oppose a version that allows crypto firms to pay interest without bank-like safeguards. His comments renewed the clash between lenders and crypto companies over stablecoin incentives.
The key question is whether the final Senate language draws a clear line between interest and rewards. The Tillis-Alsobrooks language seeks to prohibit bank-like yield while leaving room for incentive programs. Banking groups and crypto firms disagree over whether that boundary is strong enough.
Senators must now resolve the remaining policy disputes and align both Senate committee approaches. A final floor schedule has not been announced in the materials cited. The CLARITY Act’s next step will depend on those negotiations, including ethics and DeFi language.
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