CLARITY Act — Senators Seek Compromise on Stablecoin Yield

The CLARITY Act, designed to establish clear rules for cryptocurrency regulation in the United States, has gained renewed momentum after months of delays. Senators, crypto industry representatives, and the banking sector are working on a compromise proposal addressing one of the most contentious issues — whether stablecoin issuers should be allowed to pay yield to token holders.

What is the CLARITY Act

The Digital Asset Market Clarity Act is legislation that establishes a clear division of authority between the SEC and CFTC in regulating digital assets. The CFTC receives "exclusive jurisdiction" over spot markets for digital commodities (such as Bitcoin and Ethereum), while the SEC retains control over tokens that constitute investment contracts.

The bill passed the House of Representatives in July 2025, but stalled twice in the Senate. In January 2026, leading industry participants publicly withdrew support for the revised text, and the committee postponed hearings without setting a new date.

The stumbling block — stablecoin yield

The primary point of contention is whether stablecoin issuers should have the right to pay yield to their token holders. Crypto companies insist on this right, arguing it is essential for competing with bank deposits and money market funds. The banking sector is firmly opposed, as it would turn stablecoins into a direct alternative to deposits and attract customers away from banks.

The compromise proposal currently under discussion envisions allowing limited stablecoin yield subject to certain reserve requirements and banking oversight. The exact parameters are still being negotiated between the parties.

Key provisions of the legislation

Beyond the jurisdictional division, the CLARITY Act includes several important provisions for investor protection and market development:

• Segregation of funds: exchanges are prohibited from commingling customer funds with corporate assets
• CBDC prohibition: Federal Reserve banks are prohibited from offering central bank digital currency products or services directly to individuals
• Registration: crypto exchanges must register with the appropriate regulator and comply with AML/KYC standards
• Transparency: token issuers must disclose key information about the project, team, and use of raised funds

Timeline

Treasury Secretary Scott Bessent in recent statements hinted at a potential spring 2026 signing. However, every senator and congressional observer points to the November midterm elections as the real deadline — historically, the president's party loses congressional seats in midterms, which could complicate passage after November.

If a stablecoin compromise is reached in the coming weeks, the bill could be put to a vote in April or May. Otherwise, consideration could drag into summer, reducing the chances of passage before the elections.

What it means for the crypto market

Passing the CLARITY Act would be the largest regulatory event for the crypto industry in US history. Clear rules of the game could attract institutional capital that currently remains on the sidelines due to legal uncertainty. Banks and traditional financial institutions would gain a comprehensible framework for integrating digital assets into their products. For everyday users, this means better protection and more regulated opportunities for investing in cryptocurrencies.