U.S. senators say they have a deal “in principle” with the White House to end a long fight over stablecoin yield. The agreement aims to unlock the Digital Asset Market CLARITY Act, a wider crypto bill that has been stuck in the Senate Banking Committee since January.
Sen. Thom Tillis (R‑N.C.) and Sen. Angela Alsobrooks (D‑Md.) led the negotiations. They worked with White House advisers to craft language that both banks and crypto firms can accept, at least for now. Alsobrooks says the deal tries to protect innovation while preventing what banks call “widespread deposit flight.”
The dispute centers on a simple question of whether exchanges and platforms can pay yield on stablecoin balances through rewards programs. Banks say that looks like deposit interest and fear it could pull money out of traditional accounts.
What the Stablecoin Yield Compromise Would Change
Draft language circulating in Washington would sharply limit yield on passive, idle stablecoin balances. Platforms would not be allowed to pay ongoing rewards that are “economically equivalent” to bank interest just for holding tokens.
The proposal follows the earlier GENIUS Act, which already bans payment stablecoin issuers from paying interest directly. Banks now want to close the remaining workarounds in which exchanges or affiliates pass through yield from reserves. The new Senate language tries to do that by covering indirect rewards as well.
Crypto companies argue that a broad ban on passive yield hurts competition. They say stablecoins backed by Treasury bills already earn returns in the background, and some of that could safely flow to users. Still, most industry lobbyists accept that some limits are the price for finally getting a clear federal rulebook.
Why the Fight Matters for Banks, Crypto, and Users
For banks, the stablecoin yield question is about deposits. Analysts have warned that high‑yield stablecoin products could draw hundreds of billions of dollars away from savings accounts. A recent White House economic report, though, suggested the effect on total bank lending would be small.
Crypto platforms see the issue as a test of how far tokenized dollars can go. If the CLARITY Act passes with a strict yield curb, stablecoins would function more like basic payment tools than full savings products. If the rules are looser, they could compete more directly with money market funds and bank deposits.
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