The World Awaits US Lawmakers and Crypto Clarity 

The Digital Asset Market CLARITY Act, a comprehensive Senate crypto regulatory bill, is currently before the Senate Banking Committee ahead of a scheduled markup. Its aim is to resolve long-standing uncertainty around classification and oversight between the SEC and CFTC, replacing regulation by enforcement with clearer statutory frameworks for digital assets.

Key stakeholder pressures and changes

Banks and traditional financial lobbies are pushing for strict limits on stablecoin yield. The most recent draft broadly bans interest or yield paid simply for holding a payment stablecoin, extending beyond issuers to crypto service providers such as exchanges. Only activity-linked incentives (staking, liquidity provision, payments, governance, or other usage) would remain permissible.

Banks appear intent on controlling anything associated with the US dollar or its derivatives. In effect, any interest or yield would be retained by institutions rather than passed through to consumers. Unsurprisingly, this is likely to sit poorly with users already frustrated by banks’ margin-preserving behaviour.

Crypto firms and DeFi advocates have pushed back, warning the provisions could undermine established reward programs. They argue activity-based incentives are essential for on-chain utility. Coinbase has even signalled it may reconsider its support if these measures remain.

Stablecoin proponents, meanwhile, are seeking clear rules that allow stablecoins to remain “boring” payment instruments, without being treated as securities or bank deposits.

For consumers seeking yield, the bill would likely end passive stablecoin interest returns within US-regulated entities. DeFi protocols, however, could still offer yield by structuring rewards around active participation (such as lending, liquidity pools or staking) with the yield product regulated as a separate financial instrument.

A notable provision would fast-track “non-ancillary” market status for tokens that were principal assets in regulated ETPs (ETFs) as of 1 January 2026. This could effectively place assets such as BTC, ETH and potentially XRP, Solana, DOGE, Litecoin, Hedera and Chainlink closer to Bitcoin’s commodity-style treatment, offering clearer regulatory pathways and reducing securities risk under the SEC.

Overall, negotiations remain fluid. Delays to markup reflect political resistance and ongoing lobbying pressure. Still, the bill signals a shift toward clearer crypto regulation: stablecoin yield curtailed, use-case incentives preserved, and ETF-linked assets advantaged in classification.

For yield-seeking investors, this may encourage rotation out of stablecoins and into cryptocurrencies such as ETH, SOL and XRP, particularly as new DeFi products and bridges expand staking and yield opportunities. Could this see renewed buying interest in “blue-chip” crypto assets?

Time will tell.