After Senators Thom Tillis and Angela Alsobrooks shared the final wording for the CLARITY Act’s stablecoin compromise on May 1, Coinbase CEO Brian Armstrong responded on X with a simple, three-word message: “Mark it up.” This was a call to action for the Senate Banking Committee to move the bill forward – a bill Armstrong had previously paused in January.
Summary
- The Tillis-Alsobrooks compromise bans crypto firms from offering any interest or yield that is “economically or functionally equivalent” to a bank deposit.
- Coinbase Chief Policy Officer Faryar Shirzad said banks secured tighter restrictions on rewards but the deal protected “the ability for Americans to earn rewards, based on real usage of cryptocurrency platforms and networks,” which he framed as the core issue throughout negotiations.
- Polymarket odds of the CLARITY Act becoming law in 2026 jumped from 46% to 64% within hours of the deal, with Galaxy Research head Alex Thorn saying a Senate Banking markup could come as soon as the week of May 11.
Brian Armstrong, the CEO of Coinbase, has significant influence over the fate of this particular bill. As crypto.news reported, he previously withdrew Coinbase’s support just before a scheduled vote, which led to the vote being postponed indefinitely. This happened after Coinbase and Stripe rejected an earlier version of the bill, causing a 20% drop in Circle’s stock price. The current version, developed by Tillis and Alsobrooks after extensive negotiations, clearly defines what’s considered acceptable in terms of earning rewards – it allows rewards for active platform use but prohibits those earned passively.
According to Benzinga, the SEC, CFTC, and Treasury Department have been instructed to create a set of rules within the next year outlining acceptable reward programs. Coinbase CEO Brian Armstrong’s company projects $1.35 billion in revenue from stablecoins in 2025, meaning the rules around yields will directly impact their finances, not just be a matter of policy.
As a crypto investor, I was following the CLARITY Act closely, and JPMorgan analysts were saying its passage around mid-year could be a big boost for the whole market. The main sticking point seemed to be how stablecoins could earn yield. Apparently, there was a compromise: banks got more control over rewards, but the core principles we care about were preserved. Even though the Crypto Council for Innovation’s CEO, Ji Kim, still had some worries about how broad the language was, she encouraged the committee to move forward with the next stage of the process.
Before the recent developments, Galaxy Digital estimated a 50% chance of the bill passing by 2026. However, Thorn cautioned that the likelihood of it becoming law would significantly decrease if progress stalled beyond mid-May. The bill still faces several hurdles, including approval from the Banking Committee and a Senate vote requiring 60 votes. It also needs to be aligned with versions passed by both the Agriculture Committee and the House in July 2025, before it can be sent to President Trump for consideration.
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2026-05-04 22:07