Negotiations over the Digital Asset Market Clarity Act have stalled for nearly two months, with a central dispute revolving around whether crypto platforms should be allowed to offer rewards or yields on stablecoin holdings. The banking industry, led by the American Bankers Association (ABA), has lobbied aggressively against such rewards, arguing they are functionally equivalent to bank deposit interest and could trigger significant deposit flight from traditional financial institutions, reshaping financial liquidity.
Key lawmakers, including Senator Thom Tillis (R-N.C.) and Senator Angela Alsobrooks (D-Md.), are now at the center of efforts to broker a compromise. Alsobrooks stated at an ABA summit that any deal would likely leave both sides "just a little bit unhappy." The emerging compromise appears to focus on allowing rewards tied to customer activity or transactions, rather than simply the amount of stablecoins held, a position recently suggested by JPMorgan Chase CEO Jamie Dimon and supported by the crypto industry.
The legislative impasse has delayed a crucial Senate Banking Committee markup hearing, originally scheduled for earlier this year. Coinbase withdrew its support for the bill after Tillis and Alsobrooks proposed amendments to limit stablecoin rewards. While discussions with stakeholders like the Digital Chamber of Commerce remain constructive, unresolved issues beyond yield—including DeFi oversight and conflict-of-interest rules for government officials holding crypto—continue to pose challenges.
In a parallel development, a separate legislative battle is unfolding over a proposed ban on a U.S. Central Bank Digital Currency (CBDC). Senator Ted Cruz (R-Texas) has filed an amendment to remove a sunset clause from a temporary CBDC ban included in a housing bill, seeking a permanent prohibition. A group of 32 House Republicans, led by Rep. Michael Cloud, has similarly warned they may oppose the housing legislation without a permanent ban.
The path forward for the Clarity Act remains uncertain. Even if a compromise on stablecoin yield is reached and the bill clears committee, it faces procedural hurdles in the Senate, including limited floor time and unresolved Democratic concerns on other crypto policy matters.
