US banking trade groups have called for the stablecoin yield settlement amendment in the long-awaited CLARITY Act. The statement comes ahead of an expected markup on cryptocurrency legislation next week. After months of negotiations, US lawmakers, cryptocurrency industry players and banks have reached an agreement on how stablecoin yields will be approved under the upcoming regulatory framework.
In particular, the CLARITY Act would prohibit all forms of deposit-like negative interest on stablecoins, effectively preventing competition with traditional bank savings. However, the bill would allow all forms of rewards associated with bona fide activities, including staking, transaction activity, or providing liquidity. The goal is mainly to promote a “buy and use” approach to stablecoins, rather than “buy and hold.”
Banking unions move to close negative ‘loopholes’
in Share X On May 8, freelance reporter Eleanor Territt shared a letter from banking trade groups proposing changes to the stablecoin revenue section of the CLARITY Act. Parties to this letter included the American Banking Association, the Banking Policy Institute, the Consumer Bankers Association, the Financial Services Forum, the Independent Community Bankers of America, and the National Bankers Association.
The proposed revisions are primarily intended to impose an absolute ban on negative interest and prevent any flight of deposits from traditional financial institutions. As discussed below, these included grammatical modifications, particularly in Section 404(c)(1), where unions proposed replacing the phrase “functionally and economically equivalent” with “substantially similar” in determining the passive deposit income yield and return mechanisms associated with a stablecoin.
🚨NEW: Transaction Banking is making a concerted push for adjustments to stablecoin yield reconciliation ahead of the Clarity Act tokenization expected next week, arguing that current language still leaves room for rewards programs that can effectively replicate the yield.@Bank policy,… pic.twitter.com/O2aIJ9JJ93
– Eleanor Terret (@EleanorTerrett) May 8, 2026
There is also a recommendation to delete subsection (3)(b) altogether, which they claim introduces ambiguity that undermines the main objective of the settlement. However, these recommendations are unlikely to receive much attention, as lawmakers have largely shifted their focus to other aspects of the CLARITY Act. In particular, Terrett reported that a Senate aide described the trade groups’ efforts as “very nice.”
CLARITY ACT is approaching the major label stage
In other developments, the US Senate Committee on Banking, Housing, and Urban Affairs is scheduled to hold a briefing on the CLARITY Act on Thursday, May 14 at 10:30 a.m. EST. I mentioned By Terrett in a separate post.
During this process, committee members are expected to review the bill, discuss proposed amendments, and vote on whether the legislation should be submitted to the full Senate for consideration. After committee approval, the CLARITY Act must pass a full vote in the Senate and then receive approval from the House before it reaches the president’s desk to be signed into law.
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