- Coinbase Chief Legal Officer Paul Grewal stated that a deal on the CLARITY Act, specifically regarding stablecoin yield provisions, could be finalized within the next 48 hours.
- The dispute centers on “passive yields”—rewards earned simply for holding stablecoins—which banking groups fear could trigger deposit flight from traditional institutions.
- A potential compromise, led by Senators Thom Tillis and Angela Alsobrooks, may ban passive rewards while permitting activity-based incentives tied to payments and transfers.
Coinbase Chief Legal Officer Paul Grewal indicated that United States lawmakers are on the verge of resolving a significant legislative bottleneck regarding the CLARITY Act. In an interview on April 1, Grewal expressed confidence that a deal addressing stablecoin rewards and interest-bearing features could be reached by the end of the week, potentially clearing the path for the long-awaited market structure bill to advance to a Senate Banking Committee markup later this month.
The legislative progress has been stalled for months due to intense lobbying from the traditional banking sector. Financial institutions have argued that allowing crypto platforms to offer yield on stablecoins creates an unfair advantage, warning that up to trillions in deposits could migrate away from banks if consumers shift funds toward interest-bearing digital assets. Grewal challenged this narrative, noting that there is little empirical evidence to support the claim that stablecoins are the primary driver of current bank deposit pressures.
The current compromise under discussion, championed by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), reportedly seeks a middle ground. The proposed language would prohibit passive rewards—interest earned solely for maintaining a balance—while carving out exceptions for activity-based rewards. These permitted incentives would be tied to specific utility, such as using stablecoins for payments, transfers, or platform participation, rather than simple idle holdings.
Industry analysts suggest that the timing is critical. With the August congressional recess approaching and a crowded legislative calendar, the bill must clear the committee by late April to have a realistic chance of reaching the Senate floor. The CLARITY Act aims to provide a definitive regulatory framework for stablecoin issuers, clarifying which assets fall under the jurisdiction of the SEC or CFTC, and follows the momentum of previous legislation like the GENIUS Act.
“We are very close to a deal… I expect that in the next 48 hours or so, we’ll see some real progress on that front,” Grewal said during a Fox Business interview. “It’s important that we don’t let the concerns of one industry [banking] stifle the innovation of another.”
While Grewal’s comments signal optimism, some lawmakers remain cautious. Senator Tillis has previously noted that any agreement in principle still requires thorough vetting by industry stakeholders to ensure the final text does not inadvertently cripple decentralized finance (DeFi) models or disadvantage domestic crypto firms. If the deal holds, it would represent a landmark shift in U.S. crypto policy, balancing the need for consumer protection with the growth of the $300 billion+ stablecoin market.
Disclaimer: This article is for informational purposes only and does not constitute advice of any kind. Readers should conduct their own research before making any decisions.
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