In a substantial move ahead of the anticipated markup of the CLARITY Act, US banking trade groups have initiated a call for amendments to the legislation’s stablecoin yield provisions. This push comes after extensive negotiations among lawmakers, banking institutions, and crypto stakeholders, culminating in a compromise that aims to regulate the burgeoning stablecoin market.
The CLARITY Act is set to impose strict regulations on stablecoin yields, specifically prohibiting all forms of passive, deposit-like interest. This measure is designed to curb competition with traditional bank savings accounts, ensuring that stablecoins promote a more transactional approach rather than simply serving as a vehicle for passive income generation. Under the proposed framework, rewards linked to genuine activities—such as staking, transaction participation, or liquidity provision—would still be allowed.
Banking Unions Move To Close Passive ‘Loopholes’
On May 8, independent reporter Eleanor Terrett highlighted in a social media post a letter from various banking trade groups advocating for revisions to the stablecoin yield section of the CLARITY Act. The letter was endorsed by prominent organizations including the American Banking Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, the Independent Community Bankers of America, and the National Bankers Association.
The groups’ proposed changes primarily aim to reinforce the prohibition on passive interest, addressing concerns over potential deposit flight from traditional banks. Key among their suggestions is an adjustment in language within Section 404(c)(1), advocating for the term “substantially similar” to replace “functional and economic equivalent” in defining passive yield mechanisms associated with stablecoins.
🚨NEW: Banking trades are mounting a coordinated push for revisions to the stablecoin yield compromise ahead of an expected Clarity Act markup next week, arguing the current language still leaves room for rewards programs that could effectively replicate yield.@bankpolicy,… pic.twitter.com/O2aIJ9JJ93
— Eleanor Terrett (@EleanorTerrett) May 8, 2026
Additionally, the banking groups are advocating for the elimination of subsection (3)(B), which they believe introduces ambiguity that could undermine the main objectives of the compromise. However, it appears these proposed revisions may not gain traction, as lawmakers are reportedly focusing their efforts on other components of the CLARITY Act. A Senate aide described the trade groups’ attempts as “pretty milquetoast,” suggesting a lack of urgency in addressing these recommendations.
CLARITY Act Approaches Key Mark-Up Stage
The Senate Committee on Banking, Housing, and Urban Affairs is scheduled to convene for a markup session of the CLARITY Act on Thursday, May 14, at 10:30 AM EST, as reported by Terrett. During this critical session, committee members will review the bill, engage in discussions regarding proposed amendments, and vote on whether the legislation should proceed to the full Senate.
Following committee approval, the CLARITY Act will require a vote in the full Senate and subsequent approval in the House of Representatives before it can be presented to the President for final ratification into law. The stakes are high as the outcome of this legislation could significantly shape the future landscape of stablecoin regulation in the United States.
