Landmark Legislation Greenlights Stablecoin Interest Regulations, Paving Way for Sweeping Cryptocurrency Reform

The US crypto industry is poised to gain greater regulatory certainty as the CLARITY Act inches closer to becoming a law, following the introduction of new provisions related to stablecoin yields. According to Faryar Shirzad, Coinbase's chief legal officer, the latest development brings the legislation one step closer to fruition. Shirzad expressed his enthusiasm on X, stating that it's high time for the CLARITY Act to be passed, now that US Senators Thom Tillis and Angela Alsobrooks have released the final text of the bill, which aims to resolve the longstanding dispute between the banking and crypto sectors over stablecoin yields.

The newly published text, titled "SEC 404. Prohibiting interest and yield on payment stablecoins," stipulates that crypto firms are prohibited from paying customers interest or yield solely for holding stablecoins, similar to traditional bank deposits. However, the regulation does permit companies to offer rewards to customers who engage in "bona fide activities" on their platforms. While some industry leaders, such as Helius Labs CEO Mert Mumtaz, have expressed disappointment with the ruling, others see it as a significant step forward.

The resolution of the stablecoin yield debate has been a major hurdle in the passage of the CLARITY Act, despite initial expectations that it would progress through Congress earlier this year. With this issue now resolved, industry executives are urging lawmakers to move forward with the legislation. Faryar Shirzad emphasized that it's time to focus on the broader bill, while Coinbase CEO Brian Armstrong has called for the bill to be marked up. Traders on the Polymarket crypto prediction market are bullish on the legislation's prospects, assigning a 55% probability of the CLARITY Act being signed into law in 2026, a 9% increase over the past 24 hours.

Alex Thorn, head of firmwide research at Galaxy Digital, anticipates that the Senate Banking Committee will schedule a markup of the bill "imminently," potentially as early as the week of May 11. However, Thorn warns that the banking sector is likely to intensify its opposition to the legislation. US Senator Bernie Moreno has expressed optimism that the CLARITY Act will be passed by the end of May, while Senator Cynthia Lummis has emphasized that the time for action is now, stating "it's now or never" on April 11.