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Major US banking associations rejected the Clarity Act\u2019s stablecoin yield compromise, splitting publicly from Coinbase and Circle<\/p>\n
\n Summary<\/span>\n <\/p>\n <\/p>\n Major US banking associations publicly rejected the stablecoin yield compromise brokered by Senators Tillis and Alsobrooks in the Clarity Act. The banking groups argued the deal introduces systemic risk to traditional financial institutions, warning that yield-bearing stablecoins could drain trillions from the deposit base. <\/p>\n Standard Chartered analysts estimated the risk at up to $500 billion in deposit flight by 2028 if an open-ended yield provision were allowed.<\/p>\n Coinbase and Circle both backed<\/a> the compromise immediately after it was announced, urging the Senate Banking Committee to proceed. Coinbase CEO Brian Armstrong posted \u201cMark it up\u201d after the text dropped, and Chief Legal Officer Paul Grewal said the language preserves activity-based rewards tied to real platform participation. <\/p>\n The split between banking associations and crypto trade groups now sits at the centre of the committee\u2019s deliberations.<\/p>\n <\/p>\n The Tillis-Alsobrooks text draws a firm line: platforms cannot offer yield for simply holding a stablecoin. Rewards remain permissible only when tied to user activity, not passive balances. The framework gives the SEC, CFTC, and Treasury twelve months to define exactly what reward programs are permissible under the new language<\/a>.<\/p>\n Banking associations, including the North Carolina Bankers Association, urged members to contact Senator Tillis\u2019s office and demand changes, reopening a compromise they had helped negotiate just weeks earlier. <\/p>\n Ripple CEO Brad Garlinghouse, speaking at Consensus 2026 in Miami on May 5, said he still believes the bill will pass, describing the past week as a \u201cbig positive shift\u201d even as the committee vote remains unscheduled<\/a>. The Memorial Day recess begins May 21, leaving a narrow window for either side to claim a win before the legislative clock runs out.<\/p>\n <\/p><\/div>\n\n\n
What the compromise actually says<\/strong><\/h2>\n