The latest draft of the Clarity Act, a bill closely watched by the US crypto sector, has been postponed for release in Congress once again. Deep divisions persist over whether rewards or interest on idle stablecoin balances should be banned entirely—an unresolved debate now blocking progress on finalizing the legislation.
Draft language and reason for postponement
The new draft of the Clarity Act, spearheaded by Senator Thom Tillis, was widely expected to be unveiled this week with updates regarding stablecoin incentives. However, Senator Tillis decided to delay publicizing the bill, citing a need to wait for clarity on the Senate Banking Committee’s upcoming agenda. Sources close to the discussions revealed that the legislative team is still negotiating with both banking associations and major crypto firms.
Current draft provisions reportedly call for a total prohibition on paying rewards for stablecoins simply held in accounts. Exceptions would be made only for returns generated via active transactions. Insiders indicate that it has now become very difficult to make fundamental changes to the bill at this stage.
The complex backdrop of the debate
The long-awaited Clarity Act aims to establish a comprehensive regulatory framework for the crypto asset sector in the United States. Central to the debate is whether passive yields on stablecoins should be strictly banned. Last year’s GENIUS Act barred stablecoin issuers from offering such rewards, but did not directly prevent exchanges or third-party platforms from distributing similar benefits.
This regulatory ambiguity has been closely watched by both traditional banking and crypto firms. Major US banks have warned that allowing rewards on stablecoin balances could trigger a significant shift of deposits away from the banking sector. In contrast, crypto companies, including Coinbase, argue that a ban would stifle financial innovation and could even create new opportunities for banks themselves.
According to some records, the current draft law only blocks rewards for stablecoins left idle in accounts, but does not prevent returns for users who engage in transactions.
Deadlock persists despite calls for compromise
Throughout the year, the White House has hosted closed-door meetings aiming to broker a consensus between stakeholders. Yet entrenched positions held by both banking and crypto representatives have so far prevented a breakthrough. Senator Tillis, along with Senator Angela Alsobrooks, continues negotiations in hopes of clarifying this critical aspect of the bill.
Despite ongoing bargaining in Congress, there is still no definitive agreement on exactly how stablecoin yields should be regulated. Optimism that the Clarity Act could become law by the end of 2025, as initially planned, has faded considerably in light of recent developments.
