Bipartisan CLARITY Act limits interest on stablecoins

Senators Thom Tillis and Angela Alsobrooks unveiled a bipartisan revision to the CLARITY Act that bars passive interest on dollar‑pegged stablecoins, permits rewards tied to active on‑chain work and narrows criminal exposure under the federal money‑transmission statute. The updated bill is scheduled for Senate markup in May 2026.

The text draws a distinction between deposit‑style yield and compensation for blockchain services. Platforms would be prohibited from paying simple interest to holders of dollar‑pegged stablecoins, while still able to reward activities such as staking, where validators and delegators secure proof‑of‑stake networks. Sponsors say the change addresses concerns from banks about stablecoin yields competing with FDIC‑insured deposits.

The revision treats staking rewards as payment for a service rather than as investment returns. That classification is intended to keep those rewards from falling under securities law frameworks that apply to investment contracts, allowing proof‑of‑stake networks to compensate participants without reclassifying those payments as securities.

The bill tightens language on tokenization of real‑world assets by setting clearer criteria for how tokenized assets should be classified and which regulators would have jurisdiction. Supporters contend the clearer rules reduce uncertainty that has discouraged some institutional firms from placing assets on blockchains.

The draft changes Section 1960 of Title 18, the federal statute that governs money transmission. Under the revised language, the definition of who qualifies as a money transmitter is narrowed to exclude certain code writers and participants in decentralized protocols, limiting criminal liability that prosecutors have in some cases applied to developers and protocol operators.

The revision does not add new ethics provisions related to lawmakers’ personal cryptocurrency holdings, and it contains no new disclosure or recusal requirements tied to those holdings.

Industry response has been swift. Circle, the issuer of the USDC stablecoin, is preparing to launch an ARC token under the revised framework. Backers say bipartisan sponsorship improves the bill’s chances in a closely divided Senate, and they expect unanimous Republican support at the planned May markup. Supporters in the executive branch and on Capitol Hill have listed the legislation as a priority for both the President and Congress.