Senate moves on coinbase CLARITY Act as stablecoin yields clash looms

US lawmakers are edging closer to a comprehensive crypto market structure deal, with the coinbase CLARITY Act emerging as a key test of regulatory direction.

Coinbase signals progress on CLARITY in the Senate

In a recent interview on Fox Business, Paul Grewal, chief legal officer at Coinbase, said the US Digital Asset Market CLARITY Act is “moving toward” a markup hearing in the US Senate Banking Committee. However, he stressed that progress still depends on resolving differences over stablecoin yield and scheduling a formal markup.

Grewal noted that lawmakers are nearing agreement on several core elements of the crypto market structure bill. “I think we are very close to a deal,” he said on Wednesday, signaling that only a few divisive questions remain before the legislation could advance to a full Senate floor vote.

The comments highlight how a dispute over whether stablecoin issuers or platforms can offer yield or similar rewards has become one of the last major obstacles. Moreover, this has kept the broader effort to define federal rules for digital asset oversight in limbo, with industry participants still waiting for clear and durable standards.

Banks push back on stablecoin rewards

Traditional US banks have lobbied for tight restrictions on stablecoin incentives, arguing that attractive yields could pull deposits away from legacy institutions and destabilize the financial system. However, Grewal countered that point, saying there is no evidence supporting fears of a significant deposit flight tied to such products.

This stablecoin yield debate has been central to the holdup around a Senate Banking Committee markup. That said, Grewal’s remarks suggest that negotiators are attempting to craft a compromise that allows innovation in digital assets while addressing policy makers’ concerns about systemic risk.

The US House of Representatives passed the CLARITY Act on July 17, 2025, marking an early legislative win for supporters. In January, however, Committee Chair Tim Scott delayed a planned Senate markup, which has yet to be rescheduled, extending a period of regulatory uncertainty crypto firms have repeatedly criticized.

Trump accuses banks of stalling crypto legislation

Adding political pressure, US President Donald Trump last month publicly blamed banks for slowing work on crypto market structure laws. He claimed that financial institutions are blocking progress over disagreements on stablecoin yield payments and warned against allowing them to derail reform efforts.

“The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage,” Trump wrote, in a rare direct rebuke of the sector. Moreover, his intervention underscored how digital asset policy has become a contested front in broader debates over the future of the US financial system.

It was later reported that Trump met privately with Coinbase CEO Brian Armstrong just hours before publishing his statement. That meeting highlighted Coinbase’s growing role in policy discussions, even as the company navigates market headwinds and shifting regulatory expectations.

Coinbase shares are currently down 23% YTD, reflecting both broader sector volatility and investor concern over the pace of US rulemaking. However, any clear legislative roadmap for digital assets could change sentiment quickly, especially if it establishes predictable treatment for exchanges, custodians and stablecoin issuers.

Coinbase’s earlier reservations about the bill

In January, Armstrong said Coinbase could not support the crypto market structure legislation “as written.” He pointed to draft amendments that would remove stablecoin rewards and give banks broad scope to limit competition from digital asset platforms, warning that such changes would tilt the playing field.

Armstrong’s stance illustrated tensions between traditional finance and crypto-native companies over issues such as yield, custody and access to payment rails. That said, Grewal’s more recent comments suggest Coinbase believes the negotiation process is moving back toward a framework that balances investor protection with open competition.

Observers see the coinbase clarity act as a test case for how Washington will handle future digital asset proposals that pit incumbent financial interests against newer platforms. Moreover, the outcome on stablecoin incentives could shape business models across the sector, from exchanges to token issuers.

Risks of delay and future crackdowns

Last week, Peter Van Valkenburgh, executive director of Coin Center, warned that further delays on the CLARITY Act could leave crypto businesses exposed to sharp regulatory swings. He argued that allowing disputes over short-term business interests to block clear statutory protections for developers would be a strategic mistake.

“The point of passing CLARITY is not to trust this administration. It is to bind the next one,” he said, emphasizing that durable law, rather than agency discretion, should anchor US digital asset policy. However, without a Senate markup date, it remains uncertain when lawmakers will resolve the remaining disagreements.

For now, the future of the act hinges on whether senators can finalize language on stablecoin yield and related safeguards. A successful markup and floor vote would not only establish a baseline for federal oversight but also signal that Washington is ready to provide clearer rules for innovation in crypto markets.

In summary, the CLARITY Act’s path through the Senate will determine whether the US sets predictable ground rules for digital asset oversight or continues to rely on fragmented enforcement, with Coinbase and other major players closely watching the next moves in Washington.