CLARITY Act Clears Its Biggest Hurdle: Stablecoin Yield Compromise Text Released, May Markup Becomes the Decisive Test

The Core of the Compromise Now Public

The text released May 1 prohibits stablecoin issuers and digital asset service providers from offering yield "directly or indirectly" in any form economically or functionally equivalent to bank deposit interest. At the same time, it preserves rewards tied to payments, transfers and platform use. Yield based solely on holding reserve assets is explicitly banned, and the language is drafted broadly enough to close affiliate-based workarounds. The American Bankers Association continues to oppose the framework, including through Politico ad placements, but Senator Tillis told reporters on April 29 that banking-sector concerns had "largely been addressed" and urged Banking Committee Chair Tim Scott to move to markup. White House Crypto Council Executive Director Patrick Witt called the development a "major milestone," Coinbase CEO Brian Armstrong posted "Mark it up" on X, and Digital Chamber CEO Cody Carbone described the public release as "an important step toward resolving one of the final issues standing between the Committee and a markup."

Remaining Points of Contention and Political Dynamics

Three issues remain unresolved. First, Democratic-driven ethics language banning senior government officials and their family members from profiting personally from crypto interests — aimed primarily at the Trump family. Tillis acknowledges the need but indicates it will not appear in the Banking Committee version. Second, Senate Judiciary Chair Chuck Grassley is pushing for non-custodial DeFi developer protections to be handled through his own committee. Third, the appointment of Democratic commissioners to vacant SEC and CFTC seats. Senator Cynthia Lummis (R-Wy.), who chairs the Banking Subcommittee on Digital Assets, summarized the state of play as "almost 99% sorted out," noting that remaining friction is "political, not technical."

Five Sequential Hurdles and the Probability Picture

Five steps remain before the bill reaches the President's desk: a Senate Banking Committee markup, a 60-vote Senate floor passage, reconciliation with the Senate Agriculture Committee version cleared in January, reconciliation with the House version that passed 294–134 in July 2025, and Trump's signature. The earliest possible markup is the week of May 11; Memorial Day recess begins May 21, and only about 11 working weeks remain before the midterm campaign recess. Galaxy Research's Alex Thorn estimates passage odds at "roughly 50-50, possibly lower," Polymarket has fallen from 82% in February to 46% as of May 1, and Kalshi prices passage by July at 15–19% and by August at 37%. Senator Bernie Moreno (R-Oh.) has warned that missing the end-of-May window could shelve the legislation for years; Lummis goes further, saying failure could push the next attempt to 2030. Crucially, Treasury Secretary Scott Bessent, SEC Chair Paul Atkins and White House adviser Patrick Witt are all aligned in support — a structural backing not present in earlier digital asset bills.

[Business Development Insights]

1. Reward design becomes the new competitive battleground. Pure-yield on idle stablecoin balances will be off the table. Exchanges, wallet providers and stablecoin issuers must redesign incentives around payment activity and transaction volume — closer to a credit-card rewards model — to reconcile compliance with customer acquisition.
2. Dual-track scenario planning is mandatory. The probability of the shortest path (May 11 markup → July floor passage → summer signature) is roughly 50%. Roadmaps for tokenized RWA and stablecoin payment products should be split into a "Q3–Q4 2026 enactment" track and a "2027-or-2030" track, with go/no-go gates aligned to Senate calendar milestones.
3. U.S. regulatory delay is itself a capital-flow catalyst. Treasury Secretary Bessent has publicly flagged outflows toward Dubai and Singapore. With Y Combinator making its first stablecoin investment in April 2026 and Q1 global VC funding hitting a record $297 billion (≈¥45 trillion) — a meaningful share rotating into crypto- and AI-adjacent infrastructure — institutional capital is moving regardless of outcome. Japanese firms have a window to build a dual-hub strategy: an Asian operating base for execution and a U.S. franchise for institutional access.

[Sources]

• CoinDesk, "Clarity Act text lets crypto firms offer stablecoin rewards while shielding bank yield" (May 1, 2026)
• CoinDesk, "U.S. senator holding cards on Clarity Act's next move says it's ready to get to hearing" (Apr 29, 2026)
• CryptoTimes, "Clarity Act Stuck in Senate as Clock Ticks on 2026 Crypto Regulation" (Apr 28, 2026)
• Disruption Banking, "CLARITY Act Deadline: Senator Moreno's End-of-May Ultimatum Is Congress's Last Real Chance" (Apr 23, 2026)
• 24/7 Wall St., "Polymarket's CLARITY Act Odds Just Hit a Three-Month Low" (May 1, 2026)
• FinTech Weekly, "The CLARITY Act's Biggest Obstacle Just Fell. Four Steps Still Remain." (Mar 21, 2026)
• Coinpedia, "Will the Structure Market Bill (Clarity Act) Pass in May?" (May 1, 2026)
• Congress.gov, "H.R.3633 - Digital Asset Market Clarity Act of 2025"