The U.S. Senate is moving closer to its next decision point on the Digital Asset Market Clarity Act, a sweeping crypto market structure bill, after lawmakers released compromise language addressing one of its most contentious issues, stablecoin rewards.
The revised proposal, negotiated by Sens. Thom Tillis and Angela Alsobrooks, restricts crypto firms from offering interest-like returns on passive stablecoin holdings while allowing incentives tied to actual platform activity. The development has raised expectations that the Senate Banking Committee could take up the bill as early as the week of May 11, according to CryptoSlate.
The timing carries weight as Washington balances legislative priorities against a crowded calendar shaped by geopolitical tensions that have sharpened focus on financial systems and economic resilience. Lawmakers have increasingly framed digital asset regulation as part of broader competition over financial infrastructure.
The compromise attempts to resolve a months-long standoff between banks and crypto firms. Traditional lenders have argued that yield-bearing stablecoins could pull deposits away from the banking system, reducing funds available for loans to households and businesses. Crypto companies have maintained that rewards tied to usage, such as payments, trading or staking, serve a different purpose and should remain allowed, as reported by Yahoo Finance.
Under the updated language, payments that are "economically or functionally equivalent" to bank deposit interest would be barred, while activity-based rewards could continue under regulatory oversight. The shift appears to have brought key industry players back on board. Coinbase, which had opposed an earlier draft, now supports the revised framework, stating that it preserves user incentives linked to real network activity, according to Investors.com.
Markets reacted quickly. Shares of Circle Internet Group rose about 16%, while Coinbase gained more than 7%, reflecting investor confidence that the bill may advance, according to CNBC. Bitcoin also briefly crossed $80,000 over the weekend, extending a broader rally tied to renewed optimism around regulatory clarity, Fortune reported.
The compromise marks a turning point for legislation that had stalled since January. Earlier drafts drew sharp criticism from both sides, with banks warning of systemic risks and crypto firms arguing the rules would stifle innovation. The new text attempts to draw a line between passive income products and incentives tied to network participation, a distinction that has become central to the debate, according to Unchained Crypto.
Despite the progress, opposition from the banking sector has not subsided. The American Bankers Association and dozens of state groups have urged regulators to tighten definitions and close potential loopholes that could allow indirect yield through third-party platforms. Their concerns center on preserving the deposit base that underpins traditional lending, as outlined in letters to regulators cited by CryptoSlate.
The CLARITY Act is part of a broader push in Washington to establish federal rules for digital assets, including oversight of exchanges, token classification, and jurisdiction between agencies. The House passed its version of the bill in 2025, but Senate negotiations have been slowed by disagreements over stablecoins and regulatory authority, as previously reported by IBT.
The debate has also unfolded alongside political scrutiny of crypto's growing influence in Washington. Lawmakers have examined industry lobbying efforts, regulatory gaps and ties between digital asset firms and political figures, including concerns highlighted in prior coverage by IBT.
