Senate Stablecoin Compromise Bans Yield, Lets Three Agencies Define ‘Rewards’
A new compromise on stablecoin legislation is taking shape in the Senate, one that would prohibit platforms from offering yield on stablecoin holdings while handing the authority to define permissible “rewards” to three federal agencies. The draft text, reportedly shared with crypto industry leaders during closed-door Capitol Hill meetings, represents the latest iteration of the CLARITY Act after weeks of negotiations between Senators Thom Tillis and Angela Alsobrooks .
What the Draft Text Reveals
According to details shared by journalist Eleanor Terrett, who obtained an internal stakeholder email, the proposal would bar digital asset service providers—including exchanges, brokers, and custodians—from offering yield “directly or indirectly” on stablecoin balances. It also prohibits anything deemed “economically or functionally equivalent” to interest .
🚨NEW: New details are emerging about the latest legislative text outlining a compromise on stablecoin yield and rewards, along with early reactions from crypto industry leaders who reviewed it today.
— Eleanor Terrett (@EleanorTerrett) March 24, 2026
According to an internal stakeholder email shared with me, the proposal would… https://t.co/S3BAqr5ma0
📌 Twitter Embed Description: Eleanor Terrett reveals new details on the Senate stablecoin compromise, including the ban on yield and the three-agency framework for defining permissible rewards.
However, activity-based rewards tied to loyalty programs, promotions, or subscriptions would survive—provided they do not trigger the economic equivalence standard. The SEC, CFTC, and US Treasury would be jointly tasked with defining what constitutes permissible rewards and drafting anti-evasion rules. They have 12 months to complete this work after the bill’s enactment .
Vague Language Draws Industry Concern
While the compromise represents progress, certain elements in the text have drawn concern from industry observers. The “economic equivalence” standard could be interpreted more restrictively by future regulators, creating uncertainty for platforms designing legitimate reward programs. Additionally, the limits on tying rewards to balances make it difficult to structure incentives that encourage user engagement .
“Overall, this is a more narrow and restrictive approach toward crypto,” Terrett noted in her reporting. However, she added that the outcome appears largely in line with expectations and is broader than the original Tillis-Alsobrooks proposal, which would have imposed even tighter restrictions on crypto platforms .
Legislative Timeline and Political Pressure
The CLARITY Act already has a significant legislative history. It passed the House 294-134 in July 2025 and cleared the Senate Agriculture Committee in January 2026. The Senate Banking Committee markup is targeted for late April, with bank representatives set to review the same text on March 25 .
Senator Bernie Moreno has issued a stark warning about timing. If the bill does not reach the Senate floor by May, digital asset legislation may stall indefinitely until after the midterm elections .
🚨 NEW: Senator Bernie Moreno warns that if the #CLARITY Act DOES NOT pass by May, it will STALL INDEFINITELY 🇺🇸 pic.twitter.com/gmYLnAkpxb
— 🇬🇧 ChartNerd 📊 (@ChartNerdTA) March 19, 2026
📌 Twitter Embed Description: Senator Bernie Moreno warns that the CLARITY Act must pass by May or risk indefinite delay, adding political pressure to the legislative timeline.
Financial Stakes for Crypto Firms
The outcome of this legislative text carries significant financial implications for publicly traded crypto firms. Bloomberg Intelligence analysts estimate that stablecoin revenue made up roughly 19% of Coinbase’s total 2025 revenue. The ban on yield—and the subsequent regulatory definition of permissible rewards—will directly impact how platforms can monetize stablecoin products .
Bank feedback scheduled for March 25 could shift the final language before the committee vote. Industry participants are expected to push for clearer definitions of the “economic equivalence” standard and more flexibility for activity-based rewards that do not function as interest substitutes .
What’s at Stake
The compromise reflects a fundamental tension in stablecoin regulation: how to distinguish between prohibited interest-like yield and permissible user incentives. By tasking three agencies with jointly defining rewards, lawmakers have deferred the most contentious decisions to regulators—a move that provides political cover but introduces regulatory uncertainty .
For crypto platforms, the 12-month rulemaking period will be critical. During that time, the SEC, CFTC, and Treasury must align their definitions and create anti-evasion rules that do not inadvertently stifle legitimate business models. Industry observers will be watching the March 25 bank review closely for signs of further modifications .
Sources: Eleanor Terrett, Senate CLARITY Act, Bloomberg Intelligence.
