Sen. Thom Tillis (R-N.C.) isn't backing down. After banking industry groups blasted the bipartisan compromise on stablecoin yields in the Clarity Act, Tillis fired back on Monday, defending the deal as a "substantially improved, consensus-based product."
The spat centers on a key question: Should stablecoin issuers be allowed to offer yields that look and feel like bank interest? The compromise says no — but it also leaves room for other kinds of rewards. That middle ground has banks worried about deposit flight, and crypto firms hoping for regulatory clarity.
The Compromise: What's in It?
Tillis, who worked with Sen. Angela Alsobrooks (D-Md.) to finalize the language, said the goal was to prevent stablecoin rewards from mimicking bank deposit interest — the "core concern" over deposit flight — while still letting crypto firms offer other rewards. "We have worked in good faith with all sides throughout this process to encourage compromise and to avoid letting the perfect become the enemy of the good," Tillis said.
The compromise text explicitly bans stablecoin rewards that are "economically or functionally equivalent" to deposit interest. It also directs regulators to propose a new series of stablecoin regulations, including a disclosure regime and a list of permissible reward activities.
"Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree," Tillis added.
Banking Groups Push Back
The American Bankers Association, Bank Policy Institute, and Consumer Bankers Association released a joint statement arguing the proposed language "falls short" of protecting bank deposits. They're worried that if stablecoins can offer attractive yields, customers might pull money out of traditional bank accounts.
Pro-crypto Sen. Cynthia Lummis (R-Wyo.) called the finalized text the "culmination of months of hard work" to deliver a compromise and get the Clarity Act across the finish line. MarketDash also reached out to JPMorgan Chase (JPM) and Wells Fargo (WFC) for comment.
Coinbase Backs the Bill
In a notable shift, crypto giant Coinbase Global Inc. (COIN), which withdrew its support for the legislation in January, is now backing its advancement. That's a big deal — Coinbase's support could help build momentum for the bill in Congress.
The Clarity Act still has a long road ahead, but the compromise language suggests lawmakers are trying to thread a needle: protect banks, allow crypto innovation, and avoid a regulatory free-for-all. Whether that satisfies either side remains to be seen.
