Points of Focus

• Thom Tillis and Angela Alsobrooks propose banning fixed yield on stablecoins that mimics bank deposit interest.
• Returns tied to real usage like trading, payments, or staking remain permitted under new regulatory guidelines.
• The compromise clears a key blocker, increasing chances the bill advances, though scope and DeFi rules remain debated.

Senators Thom Tillis and Angela Alsobrooks released a compromise text on May 1 that bans stablecoin rewards equivalent to bank deposit interest while explicitly permitting activity-based rewards, clearing the single issue that had blocked the CLARITY Act from reaching Senate Banking Committee markup for months.

LATEST: 🇺🇸 Senators Thom Tillis and Angela Alsobrooks have released a stablecoin yield compromise, potentially clearing the way for a long-stalled CLARITY Act markup. https://t.co/xLOXDjiFzf pic.twitter.com/VXf89wo9GO

— CoinMarketCap (@CoinMarketCap) May 4, 2026

The deal: what is banned and what survives

The compromise text released Friday by Republican Senator Thom Tillis of North Carolina and Democratic Senator Angela Alsobrooks of Maryland prohibits crypto platforms from distributing interest or yield on stablecoin balances in a manner that is ‘economically or functionally equivalent’ to interest on a bank deposit account. A platform offering a fixed percentage return solely for holding a dollar-pegged token would fall inside that ban. 

🚨 THE US SENATE JUST UNBLOCKED THE CRYPTO MARKET STRUCTURE BILL.

And crypto platforms just lost the right to pay users interest on stablecoins.

Senators Thom Tillis and Angela Alsobrooks finalized a bipartisan deal yesterday on stablecoin yield, the single issue that had… pic.twitter.com/vohEIaztyp

— Bull Theory (@BullTheoryio) May 2, 2026

What survives is rewards tied to what the text calls ‘bona fide activities,’ meaning returns generated through active use of a crypto platform or blockchain network, such as payments, trading, or staking participation. 

Regulators will be given authority to write specific guidelines defining permissible reward activity, taking into account factors including balance size, holding duration, and user engagement patterns. Anti-circumvention provisions are included in the text to prevent firms from structuring passive yield products as ostensibly activity-based rewards.

Industry reaction and the residual concerns

Coinbase CEO Brian Armstrong posted two words on X after the text dropped: ‘Mark it up.’ Chief policy officer Faryar Shirzad said the language ‘preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said they wanted.’

Mark it up https://t.co/KZbJ7PHoVR

— Brian Armstrong (@brian_armstrong) May 1, 2026

Chief legal officer Paul Grewal added that the text ‘should not be the basis of any objection’ and that Coinbase is focused on getting a bill done. 

After months in rooms at the WH and Senate, this much is clear: a lot of the public debate overstated the risks and ignored the substance. This outcome preserves activity-based rewards tied to real participation on crypto platforms and networks, which is what the bank lobby said… https://t.co/9l56B8A1gY

— Paul Grewal (@iampaulgrewal) May 1, 2026

The Crypto Council for Innovation endorsed the bill but flagged that the prohibition language goes further than the GENIUS Act, which barred only stablecoin issuers from paying rewards. CCI CEO Ji Hun Kim wrote that the new text applies the ban to all digital asset market participants, not just issuers, calling it a scope expansion that goes ‘VERY FAR beyond’ the prior act. He urged the committee to advance the bill regardless.

The Digital Chamber says the updated stablecoin yield language is a meaningful move toward clearer, practical market structure rules that still support responsible innovation. 

The latest stablecoin yield language is an important step toward clear, workable, market structure legislation that allows for responsible innovation. pic.twitter.com/FALjyA5KHx

— The Digital Chamber (@DigitalChamber) May 1, 2026

What comes next and what could still go wrong

Galaxy Digital head of research Alex Thorn said the release of compromise text signals the Senate Banking Committee may schedule a markup hearing as early as the week of May 11. Senator Bernie Moreno has projected the bill will reach completion by late May. Senator Cynthia Lummis declared on April 11 that ‘it’s now or never,’ a reference to the Memorial Day calendar cliff after which Senate floor time compresses ahead of midterm campaigning. 

The CLARITY Act passed the House in July 2025 with bipartisan support and must clear the Senate Banking Committee markup before advancing to the full Senate floor, where it would then need to be reconciled with a version that already passed the Senate Agriculture Committee. 

Stablecoin yield was the most visible sticking point but not the only unresolved one. Pending debates include how DeFi is defined and regulated under the bill, whether provisions will address President Trump’s personal crypto business ties, and whether Democrats will receive appointments to vacant CFTC and SEC seats. Polymarket odds on 2026 passage jumped to 67% on Saturday after the yield text dropped.