Bill to Restrict CEX Stablecoin Yields Could Create Opening for DeFi Tokens
The U.S. Digital Asset Market Clarity Act aims to close a gap left by the GENIUS Act, which restricts issuers from paying interest but does not cover rewards offered by trading platforms. The American Bankers Association spent $56.7 million on lobbying. The banking industry estimates that as much as $1.5 trillion in retail deposits could flow out, while Standard Chartered forecasts a potential $500 billion funding shortfall by 2028.
Section 404(b)(2) of a draft disclosed in March 2026 would prohibit centralized exchanges from paying interest on “idle balances,” potentially ending a model under which Coinbase users earn an annualized yield of about 4% simply by holding USDC. Rewards for activities including payments, transfers, staking, governance and liquidity provision would remain permitted. An April 9 report said USDe could continue offering yield opportunities through staking and delta-neutral hedging, while USDS could do so through revenue sharing under the Sky protocol.
All Coverage
1 original reportsThe Backstory
The history behind this eventUS CLARITY Act Draft Would Restrict Stablecoin Yield and Ban Balance-Based Rewards
The CLARITY Act aims to divide oversight of crypto assets between the US Securities and Exchange Commission and the Commodity Futures Trading Commission while strengthening the GENIUS Act’s restrictions on interest payments by stablecoin issuers. A central issue is whether platforms such as Coinbase may distribute rewards. Coinbase generated more than $1.3 billion in stablecoin-related revenue in 2025, and the rules could reshape platform business models and competition for bank deposits.
The US Senate Banking Committee released a revised 309-page draft on May 12 incorporating a compromise reached by Thom Tillis and Angela Alsobrooks on May 1. It would prohibit interest or yield paid solely for holding stablecoins while preserving activity-based rewards tied to transactions, payments and platform use. The committee approved the bill by a 15–9 vote on May 14 and sent it to the full Senate for consideration.
Subscribe to Mark Radar Weekly
Every Friday, the week's strongest signals in your inbox. Unsubscribe anytime.