Clarity Act advances as senators finalize stablecoin yield compromise

Clarity Act: The CLARITY Act is a proposed Senate bill providing regulatory clarity for digital assets, particularly addressing stablecoin issuance and rewards following the GENIUS Act framework. A central dispute over stablecoin yields resembling bank interest has been resolved via compromise, banning such rewards while permitting activity-based ones under new disclosures. The bill now advances toward Banking Committee markup post-May recess. Thom Tillis: U.S. Senator from North Carolina and member of the Senate Banking Committee, focused on advancing cryptocurrency regulatory frameworks. He led negotiations to finalize a bipartisan compromise on stablecoin yields in the CLARITY Act, restricting rewards that mimic bank deposit interest to resolve a months-long impasse. Tillis plans to push the bill into markup following the May recess and supports protections for non-custodial developers. Cynthia Lummis: U.S. Senator from Wyoming prominent in cryptocurrency policy advocacy and blockchain regulation. She developed a framework shielding non-custodial open-source software developers from 1960s-era money transmitting prosecutions by distinguishing them from fund controllers. Tillis recently voiced support for this proposal amid ongoing crypto legislative discussions. Angela Alsobrooks: U.S. Senator from Maryland serving on the Senate Banking Committee, engaging in bipartisan efforts on financial legislation. She partnered with Senator Tillis to craft a stablecoin yield compromise for the CLARITY Act, allowing rewards only if they pass tests ensuring they do not function like traditional bank interest. The agreement clears hurdles for the bill's committee advancement. Yield Restrictions: The compromise bans stablecoin rewards economically or functionally equivalent to interest on bank deposits but allows those passing regulatory tests. Regulatory Mandates: Regulators must establish a stablecoin disclosure regime and define permissible reward activities. Industry Endorsement: Crypto firms back the deal for preserving activity-based rewards while addressing banking competition concerns.