CLARITY Act nears final stage in Congress

Crypto policy in Washington just got mashed into one story, but the pieces are different. The CLARITY Act is the big market-structure bill — who regulates what, when a token is a security, and when it becomes a digital commodity. The stablecoin yield crackdown people are talking about comes from a different law, the GENIUS Act. If you blur those together, you miss the actual stakes. (congress.gov) ### What is CLARITY actually about? CLARITY — formally H.R. 3633, the Digital Asset Market Clarity Act of 2025 — sets up a federal framework for crypto markets. It gives the CFTC the central role over “digital commodities,” keeps parts of SEC authority in place, and creates registration paths for exchanges, brokers, and dealers. The House passed it in 2025, and the bill was then received in the Senate and referred to the Banking Committee on September 18, 2025. (congress.gov) ### So where did the yield issue come from? From the GENIUS Act, not CLARITY. Congress passed GENIUS in July 2025, and a recent CRS brief says one of its requirements is a restriction on stablecoin issuers paying “interest or yield or rewards” to holders. That is the rule people are reacting to when they talk about stablecoin yields getting boxed in. (congress.gov) stablecoin yield? No — and this is the cleanest fact in the whole story. Congress’s own CRS note on the stablecoin yield debate says the House-passed CLARITY bill “does not have a stablecoin yield provision.” So if someone says CLARITY is the bill that directly bans yield on stablecoin balances, that is just mixing up two separate pieces of legislation. (congress.gov) ### Then why are people still arguing about yield? Because the ban is narrower than it first sounds. The CRS note says GENIUS does not explicitly stop exchanges from paying rewards on stablecoins they custody for customers, and those rewards can be structured to feel a lot like yield. The key detail is that issuers often distribute reserve income to large intermediaries, not directly to retail users. Circle’s (congress.gov)s point to. (congress.gov) ### Why does that distinction matter so much? Because stablecoin yield is really about who captures the Treasury-bill income sitting underneath the token. If issuers cannot pass it straight to holders, the economics may shift toward exchanges, custodians, broker wrappers, tokenized money-market products, or DeFi structures that manufacture return somewhere else. Basically, the yield does not disappear — the fi(congress.gov) why banks care: Congress’s researchers note that interest-bearing stablecoins could pull deposits out of the banking system. (congress.gov) ### Where is CLARITY in Congress now? It is closer to the end than the beginning, but not done. The House already passed it, and the Senate Banking Committee released its own CLARITY fact sheet in January 2026 ahead of markup work on market-structure legislation. That means the “final stage” framing is really about Senate action and whatever reconciliation process follows — not about a stablecoin-yield clause suddenly being added to House CLARITY. (congress.gov) ### Why are crypto traders connecting this to ether? The inference is straightforward. If plain stablecoin parking gets less attractive, some capital may go looking for onchain yield elsewhere — including tokenized Treasury products, lending venues, or Ethereum-based DeFi rails where a lot of that activity already lives. But that is a market interpretation, not something written into CLARIT(congress.gov)ng from there. (congress.gov) ### Bottom line The big correction is simple: CLARITY is the market-structure bill, while the stablecoin yield restriction came from GENIUS. The live question now is not whether CLARITY bans yield — it does not — but whether Congress and regulators let intermediaries keep offering yield-like rewards anyway. (congress.gov)