On 20 March 2026, U.S. Senators Thom Tillis and Angela Alsobrooks announced a breakthrough in the long-stalled CLARITY Act concerning stablecoin returns. The compromise, endorsed by the White House, represents the first substantive progress in months of lobbying battles between banks and cryptocurrency firms. Analysts describe it as a cautious step toward regulating a $316 billion market that underpins a significant portion of the digital finance ecosystem.
Key Points of the Tillis-Alsobrooks Agreement
The agreement targets the contentious issue of stablecoin yield structures. Its principal measures include:
- Ban on passive returns: Earnings generated solely by holding stablecoins are prohibited.
- Permitted activity-based rewards: Returns tied to specific actions, such as payments, transfers, or platform engagement, remain allowed.
Angela Alsobrooks emphasised that the goal is “to safeguard innovation while reducing the risk of bank deposit flight.” Previous industry analyses suggest that unregulated passive stablecoin returns could divert up to $6.6 trillion from traditional bank deposits.
Current market rates illustrate the stakes: Coinbase offers approximately 4% APY on USDC holdings, while some rival platforms advertise yields exceeding 5%, rivaling traditional savings accounts. Banks have aggressively lobbied for regulatory intervention, and this compromise largely aligns with their preferences.
Thom Tillis remains cautiously optimistic, indicating that the final draft will undergo further review with industry stakeholders. White House Crypto Council Executive Director Patrick White described the agreement as a “significant milestone,” even as other regulatory challenges persist.
Upcoming Milestones in April
The compromise is not a law. The CLARITY Act must still navigate several critical steps:
| Step | Description | Timeline |
|---|---|---|
| 1 | Senate Banking Committee markup | Mid-April |
| 2 | Full Senate vote (60 votes required) | April–May |
| 3 | Reconciliation with House Agriculture Committee version | April–May |
| 4 | Alignment with House-passed bill | Post-July 2025 |
| 5 | Presidential signature | May 2026 |
Senator Bernie Moreno warned that failure to reach the Senate floor by May could delay the legislation until after the midterm elections.
Industry Implications
Banning passive returns is widely viewed as a bank-friendly outcome. While activity-based yields allow some flexibility for crypto platforms, DeFi products that rely on earnings from idle balances are significantly constrained.
The compromise provides the sector with regulatory clarity, safeguards bank interests, and imposes a tight timeline for legislative action. With the May deadline approaching, stakeholders have little room for error.