Momentum around stablecoin regulation picked up on May 1 after Coinbase CEO Brian Armstrong backed a new Senate deal and urged lawmakers to move fast.
Senate deal reshapes the debate
Senators Thom Tillis and Angela Alsobrooks released the final stablecoin yield compromise text for the CLARITY Act, and Armstrong replied on X with three words: “Mark it up,” a clear push for action.
The Tillis-Alsobrooks proposal would bar crypto firms from offering any interest or yield that is “economically or functionally equivalent” to a bank deposit. However, Coinbase said the package still preserved room for rewards tied to real use of crypto platforms and networks.
Coinbase Chief Policy Officer Faryar Shirzad said banks won tighter limits on rewards, but the compromise protected “the ability for Americans to earn rewards” through genuine participation. That framing has sat at the center of the negotiations for months.
Why Armstrong’s support matters
Armstrong’s backing carries unusual weight in Washington. He had withdrawn Coinbase’s support hours before a scheduled January 14 committee markup, and Banking Committee Chair Tim Scott postponed the vote indefinitely. Since then, the bill has not returned to markup.
Moreover, the latest banking compromise text emerged after months of talks with the White House, banking groups, and crypto firms. It draws a sharper line around passive yield, while still allowing rewards linked to actual participation on crypto platforms.
According to Benzinga, regulators including the SEC, CFTC, and Treasury must jointly issue rules within one year. Those rules will define a non-exhaustive list of permitted reward activities, which makes the policy timeline especially important.
Coinbase reported $1.35 billion in stablecoin revenue in 2025, so the outcome is a direct business issue for the exchange, not just a legal question. That said, analysts also see wider market implications if the bill advances.
Market odds rise as lawmakers prepare
Polymarket odds for the CLARITY Act becoming law in 2026 jumped from 46% to 64% within hours of the announcement. Galaxy Research head Alex Thorn said a Senate Banking markup could happen as soon as the week of May 11.
JPMorgan called passage by midyear a “key positive catalyst” for digital asset markets, and said the stablecoin yield issue was the biggest remaining obstacle before the compromise was finalized. In that context, the clarity act markup date has become a closely watched signal.
Shirzad acknowledged the trade-off, saying banks secured tighter limits while Coinbase protected what matters. The crypto rewards rules now stand as the main unresolved economic detail in the bill.
The Crypto Council for Innovation’s Ji Kim also said the text still raised concerns because of its breadth, but he urged the committee to proceed. Moreover, Galaxy Digital had previously estimated 2026 passage odds at roughly 50-50 before the deal.
Thorn warned that if markup slips past mid-May, the odds of enactment would fall sharply. The bill still must clear the Senate Banking Committee, win 60 votes on the Senate floor, reconcile differences with the Agriculture Committee version, and then align with the July 2025 House text before reaching the President.
For now, the new bargain gives lawmakers a path forward, but it does not settle the broader fight over how the U.S. should treat rewards, deposits, and market structure in crypto.
