Clarity Act Deal Could Ban Stablecoin Yields; Circle Leads Crypto Sell-Off

Senate revisions to the Clarity Act digital market structure bill could deal the cryptocurrency industry a major blow. Reports indicate that new language will affect stablecoin yields payments.

Stablecoin issuer Circle Internet Group (CRCL) led declines, diving nearly 20%. Crypto exchanges Coinbase (COIN), Bullish (BLSH) and Gemini Space Station (GEMI) also tumbled.

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The revised language for the Digital Asset Market Clarity Act comes after Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-MD) on Friday reached an agreement regarding the hotly-debated topic of stablecoin yields. The crypto industry got its first look at the revised section this week during a closed-door review in Washington, D.C., CoinDesk reported.

The language allowing stablecoin yields is narrow and unclear. It would ban yield payments for holding stablecoins, according to analysts’ initial impression. The language also restricts approaches to make stablecoin programs equivalent to a bank deposit. And it provides additional limits to other potentially allowed activities. The mechanisms for determining activities-based stablecoins, or rewards for transaction activities, are also left uncertain, CoinDesk reported.

Clarity Act Stablecoin Debate

Stablecoin payment issues have held up the legislative progress as the banking and crypto industries debate the best course of action. Traditional banks have voiced concerns that stablecoin yields will siphon away customers and deposits, which could affect lending and compromise community banks. The crypto industry says yields and rewards payments are necessary to develop the industry and compete against foreign firms.

The GENIUS Act passed last year prohibited stablecoin yields for holding parked funds. But the American Bankers Association argued some companies exploited a loophole allowing issuers to indirectly fund payments to holders.

The recent compromise appears to allow rewards programs for stablecoin activities, but not balances.

A similar version of the Clarity Act passed the House of Representatives last year and advanced from a Senate Agriculture Committee markup hearing in January. The bill still needs to pass a markup in the Senate Banking Committee before it can be introduced to the Senate floor. The banking committee’s markup hearing will likely occur in late April.

Circle Leads Cryptocurrency Tumble

Circle stock unraveled about 19% Tuesday to undercut its 21-day moving average. Shares of the stablecoin issuer are up 33% so far this year.

Coinbase dived 9% to fall below its 50-day line. COIN stock has carved 18% lower in 2026.

Bullish retreated almost 5% to flip negative on the year.

Gemini stock fell more than 8%, extending its 2026 drop to nearly 47%.

The price of bitcoin on Tuesday slid back below $70,000 after rebounding above that level on Monday.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison.

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