Stablecoin

DeFi

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Rewards

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<p>In CLARITY Act news today, the Senate Banking Committee released an updated stablecoin legislative draft ahead of a scheduled May 14, 2026, markup session, incorporating new language on yield-bearing stablecoin rewards, DeFi treatment, and explicit protections for non-custodial software developers.</p>
<p>These are provisions that directly affect the competitive positioning of stablecoin issuers, DeFi protocols, and the payment infrastructure equities tied to them.</p>
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<p>The broader stablecoin market has surpassed $240Bn in total capitalization as of mid-2026, with <a href="https://tokenist.com/circle-ipo-blackrock-crypto-buidl-usdc-ecosystem/" rel="noopener noreferrer nofollow">Circle’s USDC ecosystem</a> among the most directly exposed to the bill’s final reward and yield provisions.</p>
<p>The markup is the committee’s second attempt, following a January 2026 session that collapsed when Coinbase withdrew support over unresolved stablecoin reward concerns, a signal of how commercially sensitive the yield-bearing language remains for the industry.</p>
<h2 class="wp-block-heading" id="clarity-act-news-blockchain-regulatory-and-the-certainty-act-inclusion">CLARITY Act News: Blockchain Regulatory and the Certainty Act Inclusion</h2>
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   <p>U.S. Senate Banking Committee Receives Over 100 Amendments to Crypto Market Structure Bill<br><br>According to Politico, ahead of the U.S. Senate Banking Committee’s markup vote on the crypto market structure bill, the CLARITY Act, committee members have submitted more than 100… <a href="https://t.co/6yH0SH7Rgc" rel="noopener noreferrer nofollow">pic.twitter.com/6yH0SH7Rgc</a></p>— Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/2054390057059107235?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 13, 2026</a>
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<p>The updated draft introduces the Blockchain Regulatory Certainty Act (BRCA), which exempts non-custodial developers and validators from being classified as money transmitters, easing their compliance with the Bank Secrecy Act.</p>
<p>This change is significant for the DeFi ecosystem, encouraging more developers to participate in US-based projects.</p>
<p>Additionally, the draft clarifies that NFTs are not classified as securities during their sale or transfer, addressing ongoing legal uncertainties for token projects.</p>
<p>An industry group noted that the bill includes crucial provisions for developers, viewing the outcome as a win for the crypto sector and aligning with Chair Tim Scott’s view of collaborative progress.</p>
<p>For DeFi protocols like Aave, which recently received $25M in funding, the BRCA reduces regulatory risks associated with U.S. smart contract infrastructure, potentially broadening the market for DeFi products if the bill is enacted.</p>
<h2 class="wp-block-heading" id="stablecoin-rewards-and-yield-language-the-404-compromise-and-what-it-forecloses-for-issuers">Stablecoin Rewards and Yield Language: The “404 Compromise” and What It Forecloses for Issuers</h2>
<p>In other CLARITY Act news, the bill’s treatment of stablecoin rewards centers on what negotiators have called the “404 compromise”: a provision that permits stablecoin rewards only when they are not economically or functionally equivalent to interest or yield on an interest-bearing bank deposit.</p>
<p>Senators Elizabeth Warren (D-MA) and Thom Tillis (R-NC) introduced the restriction framework in May 2026, drawing criticism from banking trade associations, which called the revisions insufficient despite the structural changes.</p>
<p>The distinction matters commercially: stablecoin issuers that have built rewards programs, effectively distributing a share of reserve yield to holders, would need to restructure those programs to comply, or risk classification as deposit-taking institutions subject to bank-level regulation.</p>
<p>If this provision passes as drafted, it would constrain the yield-distribution models being tested by several fintech and crypto-native issuers while preserving the traditional banking sector’s regulatory moat on deposit products.</p>
<p><a href="https://tokenist.com/stablecoin-banks-not-under-threat/" rel="noopener noreferrer nofollow">Moody’s has assessed that stablecoin banks do not currently threaten deposit flight from traditional institutions</a>, a view that this bill’s reward restrictions would structurally reinforce.</p>
<h2 class="wp-block-heading" id="senate-draft-vs-house-clarity-act-where-the-two-bills-diverge-and-what-reconciliation-requires">Senate Draft vs. House CLARITY Act: Where the Two Bills Diverge and What Reconciliation Requires</h2>
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   <p>CLARITY is closer than ever.<br><br>The bill is strong. It will benefit the American people by making the US financial system faster, cheaper and more accessible. It will also ensure that the US leads in the global race to build the next generation of our financial system.<br><br>Huge thank… <a href="https://t.co/mt8lkJ4W3v" rel="noopener noreferrer nofollow">pic.twitter.com/mt8lkJ4W3v</a></p>— Brian Armstrong (@brian_armstrong) <a href="https://twitter.com/brian_armstrong/status/2054552885376016718?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 13, 2026</a>
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<p>The Senate draft and the House’s CLARITY Act, passed in summer 2025, diverge most sharply on developer protections, with the House version excluding the BRCA language present in the Senate text.</p>
<p>Reconciling the two chambers will require a 60-vote threshold in the Senate, a bar that makes the current bipartisan framework fragile. Senate Democrats, led by Warren, have drawn attention to the bill’s omission of any provision addressing Trump’s family crypto holdings, reported at $1.4Bn in gains, as a condition of broader Democratic support.</p>
<p>The Senate Agriculture Committee advanced a parallel CFTC authority bill on January 29, 2026, defining digital commodities and spot market intermediaries after rejecting Democratic amendments that would have barred public officials from crypto dealings, a pattern that mirrors the Banking Committee’s approach of separating conflict-of-interest language from the core regulatory structure.</p>
<p>For payment infrastructure investors tracking stablecoin-linked equities, the key variable is whether the 60-vote coalition holds during floor consideration, which lawmakers have targeted as the next big CLARITY Act news, with completion set before a unified bill reaches the president by Thanksgiving 2026.</p>
<p><em>The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.</em></p>
<p>The post <a href="https://tokenist.com/clarity-act-news-senate-stablecoin-bill-defi-rewards-updated-draft/" rel="noopener noreferrer nofollow">CLARITY Act News: Updated Senate Stablecoin Bill Tackles DeFi and Rewards in New Draft</a> appeared first on <a href="https://tokenist.com" rel="noopener noreferrer nofollow">Tokenist</a>.</p>

CLARITY Act News: Updated Senate Stablecoin Bill Tackles DeFi and Rewards in New Draft

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