Summary
- JPMorgan says CLARITY Act talks have narrowed to 2–3 core disputes as senators race to finalize a stablecoin deal before midterms.
- The bill would ban passive yield on stablecoin balances while allowing activity-based rewards, reshaping revenue models for issuers like USD Coin.
- Coinbase and major banks have clashed over the yield language, with a White House compromise now framing “idle yield” as off‑limits but transactional incentives as acceptable.
Negotiations over the U.S. CLARITY Act, a sweeping digital asset market structure bill, have entered their final stage, with JPMorgan analysts saying the number of disputed issues has fallen from more than a dozen to just two or three core questions centered on stablecoin rewards and regulatory oversight.
Final-stage talks on CLARITY Act stablecoin rules
The talks, which are unfolding in Washington ahead of the 2026 midterm cycle, aim to bolt a durable federal framework for stablecoins and broader crypto markets onto last year’s GENIUS Act, the first U.S. law to license dollar‑pegged payment stablecoins.
In a recent research note, JPMorgan argued that passage of the CLARITY Act could become a key positive catalyst for digital asset markets in the second half of 2026 by finally settling the jurisdictional split between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The political fight has focused on how far Congress will go in banning yield on stablecoin balances, a feature that has become a major revenue engine for exchanges and wallet providers.
According to FinTech Weekly, the latest Senate draft “bans passive yield on stablecoin balances” but permits “activity-based rewards tied to loyalty programmes, promotions, subscriptions, transactions, payments, and platform use,” with the SEC, CFTC and Treasury given twelve months to define the precise boundaries and anti‑evasion rules.
Coinbase chief legal officer Paul Grewal told Fox Business that negotiators are “very close to a deal” on the yield language and said he expects the bill to move toward a Senate Banking Committee markup and eventually a floor vote after the recess.
Banks, led publicly by JPMorgan, have pressed lawmakers to ensure that stablecoin products offering yield face bank‑level oversight to avoid what they describe as regulatory arbitrage against traditional deposits.
On JPMorgan’s first‑quarter earnings call this week, chief financial officer Jeremy Barnum warned that yield‑bearing stablecoins risk becoming “a tool for regulatory arbitrage unless they are held to the same strict oversight and consumer protection standards as traditional bank deposits,” remarks that landed squarely in the middle of the CLARITY negotiations.
The White House has tried to broker a compromise by drawing a line between “idle yield” for simply holding a token and transaction‑linked rewards, with one recent proposal described by BVNK analyst Stewart Will as an attempt “to prevent massive deposit flight from traditional banks to high‑yield digital assets” while still allowing stablecoins to function as a low‑haircut settlement layer.
For issuers such as USD Coin, which currently trades around $0.9998 with an estimated market capitalization of roughly $78.6 billion, the final shape of the law will determine how far platforms can go in layering incentives on top of basic dollar‑pegged balances without triggering securities or banking rules.
The CLARITY bill also interacts with the GENIUS Act, enacted in 2025 to require key payment stablecoins to be backed one‑for‑one by cash or short‑term Treasuries and to obtain a federal or state licence as a Permitted Payment Stablecoin Issuer.
Policy analysts at Brookings say that GENIUS‑regulated payment stablecoins sit in a distinct category outside of both securities and traditional bank deposits, leaving CLARITY to decide how those instruments plug into capital markets, DeFi protocols and tokenized bank money such as JPMorgan’s own deposit token projects.
As senators race to lock in text before election politics harden, JPMorgan has framed approval of the CLARITY Act by mid‑2026 as a “key positive catalyst” that could unlock institutional participation in crypto once stablecoin rules, yield limits and agency mandates are finally pinned down.
