Stablecoin Yield Ban on the Table as Senate Battles Over CLARITY Act

• Senate CLARITY Act markup begins with 137 amendments targeting stablecoin yield and DeFi rules.
• CLARITY Act faces 137 amendments. Warren wants stablecoin yield banned outright.
• Senate debates 137 crypto amendments focused on stablecoin yield and DeFi regulation.

The Senate Banking Committee has begun its markup process for the CLARITY Act, facing a wave of 137 proposed amendments that could reshape cryptocurrency regulation in the United States. The committee released the 278-page draft on Monday night, following five months of bipartisan negotiations.

Lawmakers submitted their amendments by the Tuesday 5 P.M. deadline. Many proposals target stablecoin yield mechanisms and decentralized finance protocols. The industry received its first look at the complete bill language on Tuesday morning.

Stablecoin Yield and DeFi Regulations Draw Heavy Scrutiny

Stablecoin yield has emerged as a primary point of contention. Senators Angela Alsobrooks and Thom Tillis introduced bipartisan amendments aimed at clarifying which activities allow users to earn yield. Their proposals seek to establish clearer boundaries between permitted and prohibited yield structures.

Decentralized finance protocols face significant revisions. Senators Pete Ricketts and Cynthia Lummis submitted amendments addressing DeFi language after industry groups expressed concerns about the original text. The new DeFi section had raised questions about the regulatory treatment of protocols.

Senator Chris Van Hollen proposed ethics-focused amendments. One provision would bar government officials from profiting from crypto business interests. Another would require financial disclosure from individuals promoting cryptocurrency products.

The Banking Committee may lack jurisdiction over some ethics proposals. These measures could be moved to later stages of the Senate process rather than receiving votes during the current markup.

Warren Package Targets Stablecoin Payments and Regulatory Guidance

Senator Elizabeth Warren submitted more than 20 amendments to the bill. Her package includes a provision to prohibit yield payments on stablecoins entirely. Warren also seeks to reverse the crypto-friendly guidance released by the Office of the Comptroller of the Currency in 2024.

Senator Jack Reed introduced an amendment supporting Federal Reserve Chairman Jerome Powell during an ongoing investigation by the Department of Justice. The filing suggests that some lawmakers are using the markup process for broader political statements, extending beyond cryptocurrency policy.

White House Crypto Council Executive Director Patrick Witt indicated that officials plan to add ethics language after committee approval but before the full Senate vote. The statement indicates that further modifications will be made after the markup session.