Congress Nears Historic Deal on Stablecoin Rules: What You Need to Know!

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CLARITY Act Update: Congress Agrees on Stablecoin Yield Rules

Key Takeaways

  • A bipartisan deal on stablecoin yield rules is ~99% resolved, clearing the biggest obstacle to the CLARITY Act
  • Banks win a ban on passive interest; crypto platforms can still offer activity-based rewards
  • The SEC and CFTC jointly reclassified Bitcoin, Ethereum, and XRP as “Digital Commodities” in March 2026
  • The bill still faces political landmines – Trump’s crypto ties and DeFi liability rules remain unresolved

A new report from Politico says the CLARITY Act has overcome a major hurdle: a disagreement about whether companies dealing with cryptocurrency should be able to offer interest on stablecoin holdings. Senators Tim Scott, Thom Tillis, and Angela Alsobrooks, in collaboration with the White House, have reached a compromise that isn’t ideal for either side, but is acceptable to both.

The new rule would stop platforms from offering interest on stablecoins held as savings. However, users could still earn rewards by *using* their stablecoins – for example, by making purchases, sending money, or participating in decentralized finance (DeFi). Simply holding stablecoins won’t earn interest, but actively using them might.

The Stakes Were Never Really About Yield

The American Bankers Association and the Independent Community Bankers of America weren’t just debating semantics; they were concerned about protecting hundreds of billions of dollars in deposits. They argued that stablecoins offering returns of 4-5% could lead to a massive outflow of money from banks, something not seen in decades. For example, one estimate from Standard Chartered suggests that if stablecoins reach a $2 trillion market value by 2028, they could draw $500 billion away from the banking system.

Coinbase strongly opposed the bill. Rewards paid in stablecoins make up nearly 20% of their revenue during certain quarters, and they temporarily stopped supporting the bill due to this issue. They resumed discussions primarily because of a compromise regarding rewards based on user activity.

Patrick Witt, who effectively leads crypto policy at the White House, has been key in ongoing discussions. He believes resolving the issue of crypto yields will be the first step towards passing broader legislation governing the crypto market. However, it remains to be seen if this will actually happen. Senate Democrats are advocating for a rule preventing politicians and their families from owning cryptocurrency, a measure widely understood to be aimed at former President Trump’s financial connections. Republicans are currently resisting this proposal. Another unresolved issue is who should be held accountable for money laundering on decentralized finance (DeFi) platforms – specifically, whether developers should be liable for activity on systems they created but no longer manage.

The Broader Regulatory Picture Has Already Shifted

The U.S. regulatory landscape for digital assets has already shifted considerably, even before the CLARITY Act is voted on. In March 2026, the SEC and CFTC jointly announced that Bitcoin, Ethereum, and XRP will be classified as “Digital Commodities.” This decision, based on whether these assets are decentralized, effectively moves them out of the SEC’s oversight as securities. This is a major, fundamental change for the industry, which has long been defending itself against SEC enforcement actions.

Early in 2025, a rule called SAB 121 was removed, which had made it financially difficult for large companies to securely hold cryptocurrency. With that rule gone, major financial institutions like BNY Mellon, State Street, and JPMorgan Chase have begun offering crypto custody services, bringing much-needed liquidity to the market. Also, the legal case involving Ripple concluded favorably, with the SEC withdrawing most of its claims. This means XRP is now considered a non-security on secondary markets, and the SEC has until March 27th to decide on applications for Spot XRP ETFs, which experts believe have a greater than 90% chance of being approved. Finally, President Trump issued an order directing the Justice Department and FBI to focus their efforts on international criminal groups using digital assets for illegal activities, rather than on domestic crypto companies.

The Window Is Narrow

Currently, the stablecoin market is worth over $316 billion, according to DefiLama data. The cryptocurrency industry has invested more than $190 million in political action committees to support the passage of this legislation. The White House aims to have it signed into law before the 2026 midterm elections, as major legislation becomes increasingly difficult to pass closer to an election.

Industry experts believe it will take six to eighteen weeks to get the CLARITY Act through the necessary committees and scheduled for a vote. If the bill passes through committee by early April, it has a good chance of being voted on before summer. However, if key issues regarding ethics or responsibility for DeFi technologies aren’t settled by May, this version of the bill will likely fail, and the process will have to start all over again in 2027.

This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t recommend any particular investment or cryptocurrency. Always do your own research and talk to a qualified financial advisor before investing.

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2026-03-21 09:48