CLARITY Bill Stablecoin Yield Clause Reaches Compromise

The U.S. Senate has finalized the text of the CLARITY Bill's stablecoin yield clause, explicitly prohibiting passive income similar to deposit interest for passive holders of stablecoins, while allowing rewards based on payment, transfer, and on-chain usage activities. This clears a key hurdle for the bill's formal review in the Senate in May.

According to the latest draft and prediction market data, the text was finalized by Senators Thom Tillis and Angela Alsobrooks, closing loopholes that allowed issuers, exchanges, and related parties to indirectly pay interest through structural designs. It permits platforms to continue offering points, cashback, or on-chain rewards linked to actual usage. As a result, the implied probability of the CLARITY Bill being signed before 2026 has risen from previous lows to about 55%-62%, reflecting traders' belief that while the legislative path remains constrained by bank lobbying, the probability has shifted from "random fluctuations" to "slightly bullish."

In market mechanisms, the passive income ban effectively locks the pricing power of "deposit-like interest rates" within the banking system, compressing the stablecoin yield space into incentives for "use rather than store": buyers shift from seeking passive income as risk-free on-chain rate users to high-frequency payers, highly active on-chain users, and ecosystem participants; sellers are stablecoin issuers and trading platforms, exchanging activity rewards for trading volume and retention, rather than directly competing with bank demand deposit/term deposit rates. Banks successfully lobbied to prevent the formation of "on-chain demand deposits" that would directly squeeze their liabilities, while compliant stablecoins and payment applications gain a constrained but usable growth path under the "activity rewards" framework, with real funding spreads primarily settling within traditional banks and financial institutions holding compliant reserve assets.

Source: Public Information