After months of stalling, the Clarity Act is finally moving. Senators Thom Tillis and Angela Alsobrooks released a stablecoin yield compromise late last week that effectively clears the path for a Senate Banking Committee markup. Senate Banking Committee Chairman Tim Scott confirmed the markup is happening in May.
What the Banks Got and What They Did Not
The stablecoin yield language has been the central battleground for months. Banks pushed hard for broad restrictions on crypto exchanges paying rewards on stablecoin holdings. On the surface, the compromise extends those restrictions beyond issuers to cover third-party platforms including crypto exchanges, which looks like a win for the banking lobby.
But the detail in the language is where things get interesting. Coinbase chief legal officer Paul Grewal suggested the rewards language was either a complete capitulation to banks or had nothing whatsoever in it, implying it struck a balance that gives both sides something to claim. Coinbase CEO Brian Armstrong then posted two words: “Mark it up.”
Who Holds the Real Power
Perhaps the most significant structural element in the released language is a referral mechanism that sends potential violations to the Secretary of the Treasury rather than leaving enforcement solely with the SEC or CFTC. In practical terms, that means Bessant holds meaningful interpretive authority over how the yield restrictions are applied. A pro-crypto Treasury Secretary effectively becomes a safeguard built directly into the legislation.
The New Name to Watch
One fresh obstacle has appeared. Senator Chuck Grassley, chairman of the Senate Judiciary Committee, is expected to weigh in on provisions around Section 1960, the statute that governs criminal liability for money transmission. The section could affect DeFi developers and software builders depending on how it is interpreted. Grassley has not been part of the conversation until now and represents a new variable as the bill approaches markup.
The Calendar Is Clear
The week of May 11 is when most observers expect the markup to happen. After that, June and July are the realistic windows for a final Senate vote, a return to the House for what is expected to be a straightforward approval, and a signing at the White House. If the bill does not clear the Senate before August, the midterm election calendar takes over and the window narrows considerably.
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