The progress of the highly anticipated CLARITY Act in the Senate appears to have hit a standstill, with the core sticking point being the attribution of stablecoin yields.
Stablecoin Yields: The Root of Disagreement
Cryptocurrency firms like Coinbase are seeking the right to offer interest on stablecoins such as USDC and USDT to their users. These yields, typically ranging from 2-5% annually and backed by U.S. Treasury securities, represent a significant revenue stream for crypto businesses. Data indicates that in Q3 2025, nearly 20% of Coinbase's total revenue was derived from stablecoin-related operations.
However, the traditional banking sector holds a different view. The American Bankers Association (ABA) argues that allowing such yield distribution is tantamount to unlicensed deposit-taking. Banks are concerned this would lead to a substantial outflow of deposits from traditional savings accounts to stablecoin platforms.
To break the deadlock, the White House has attempted mediation. Crypto advisor Patrick Witt proposed a compromise: prohibiting yields on idle stablecoin balances while permitting transaction-based rewards. An agreement was initially slated for March 1st, but the banking sector rejected the proposal on March 5th. Although senators expressed ongoing efforts to find a compromise on yields during the March 10th crypto summit, the longer the stalemate persists, the more challenging a resolution becomes.
Status of the CLARITY Act in the Senate
Before the CLARITY Act can proceed to a full Senate vote, it must pass through two committees. The Senate Committee on Agriculture has already approved its portion on January 29, 2026, primarily concerning the Commodity Futures Trading Commission's (CFTC) regulatory functions, such as oversight of commodity markets and exchange registration.
Currently, the Senate Committee on Banking has become the bottleneck for the bill's advancement. A scheduled markup session on January 14, 2026, was postponed by Chairman Tim Scott due to the receipt of over 100 contentious amendments. While a second markup has not yet been scheduled, indications suggest mid-to-late March as a potential consideration window.
Beyond the stablecoin yield issue, Senate Democrats have raised other concerns, including potential conflicts related to President Trump's growing cryptocurrency business interests, which have become a recurring point of negotiation.
As of March 16th, no new markup date has been announced. Industry insiders widely believe that if substantive progress is made in the stablecoin yield negotiations, mid-to-late March will represent the next realistic window for the bill's advancement. Without progress, April will become the deadline before the mid-term election campaigns dominate the Senate's agenda.
Even if both committees successfully pass their respective reviews, the subsequent process of reconciling the two versions and integrating them with the House's version could itself take months.
Key Figures Weigh In
President Trump has been a vocal supporter of the CLARITY Act, publicly criticizing banks on March 3rd for obstructing its passage and repeatedly calling for the U.S. to become the "world's crypto capital."
Senator Cynthia Lummis (R-WY) urged compromise on March 10th, noting that the current regulatory uncertainty may be more damaging to banks than a clear regulatory framework.
Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) are central to bipartisan negotiations, working to bridge the divide between Coinbase and banking lobbyists on the stablecoin yield issue.
Senator Tim Scott (R-SC), as Chairman of the Banking Committee, holds a pivotal position, with his stance and actions significantly influencing the bill's trajectory.