Yesterday, Friday, May 1st, two U.S. senators released the final text of one of the most controversial parts of the CLARITY Act: the rules regarding yield on stablecoins [^0^]. And if you've got cash in USDC, USDT, or any stablecoin, this directly impacts you.
WHAT THE TEXT SAYS
The rule is clear and tough: no crypto company can pay you interest or yield just for holding stablecoins in your account. This includes Coinbase, Circle, Binance, and any platform that offers returns for holding.
The literal text states that paying yield in a way that is "economically or functionally equivalent to paying interest on a bank deposit" is prohibited.
BUT there's an out: rewards based on "good faith activities" or real transactions are still allowed. That is, if you use your stablecoins for payments, transfers, or participating on the platform, you can still earn.
WHY THIS IS A WIN FOR BANKS
Banks have been pushing for this to happen for months.
His argument: if stablecoins offer competitive yields, people will pull money from bank accounts and put it into crypto. That would reduce deposits and bank lending.
But the White House published an analysis that debunks that argument: banning yield on stablecoins would increase bank lending by only $2.1 billion, just 0.02% of the total. The cost to consumers: $800 million in lost benefits.
In other words: banks won a battle they didn't even need to fight.
WHAT DOES IT MEAN FOR YOU
1.
IF YOU EARN YIELD JUST BY HOLDING TODAY:
That’s coming to an end. Platforms will have to restructure their "buy and hold" programs to "buy and use".
2.
IF YOU USE STABLECOINS FOR PAYMENTS OR TRANSFERS: You'll likely still earn rewards, but the model will change. You'll have to demonstrate real activity.
3.
IF YOU'RE A COINBASE USER:
Brian Armstrong has already approved the text and said "Mark it up".
Their chief lawyer Paul Grewal said the language "preserves rewards based on real activity"
Coinbase had a lot to lose here and accepted the deal.
4.
IF YOU'RE SKEPTICAL:
Helius Labs CEO Mert Mumtaz summed it up best: Americans will no longer be able to earn yield without risk on their dollars without going through a bank.
WHAT COMES NEXT
The Senate Banking Committee could schedule the markup for the week of May 11.
Polymarket has already raised the probability of the CLARITY Act becoming law in 2026 to 55%.
If the markup passes, the path is: committee vote → Senate vote (needs 60 votes) → reconciliation with the House version → presidential signature.
Senator Cynthia Lummis warned: if it doesn't pass this year, legislation could be delayed until 2030.
CONCLUSION
The CLARITY Act is neither the end of the world nor a revolution. It's a compromise where banks protected their turf and the crypto industry kept enough to continue operating. The real question is: is it worth continuing to use stablecoins if they no longer generate passive yield?
What will you do with your stablecoins if they no longer earn interest? 👇
#stablecoin #CLARITYAct #CryptoNews #BinanceSquare #regulacion