CLARITY Act Stablecoin Text · First Step Bitcoin

CLARITY Act Stablecoin Text

The recently released compromise text for the Digital Asset Market Clarity Act (CLARITY Act), finalized on March 20, 2026, focuses on a strict separation between passive holding and active use of stablecoins.

The updated language, brokered by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) with White House backing, has triggered a significant market reaction, including a nearly 20% drop in Circle (CRCL) stock as of March 24.

Key Provisions of the Compromise

Prohibition on Passive Yield: The text explicitly bans platforms from offering yield or interest "directly or indirectly" for simply holding stablecoin balances.

This includes any mechanism deemed "economically or functionally equivalent" to bank deposit interest.

Permitted Activity-Based Rewards: Rewards are only allowed if they are tied to specific user activities, such as:

Payments and transfers.

Platform usage or loyalty/promotional programs.

Regulatory Oversight: The SEC, CFTC, and Department of the Treasury are directed to jointly define permissible rewards and establish anti-evasion rules within one year of enactment.

Industry & Legislative Status

Industry Review: Crypto industry insiders and bank representatives began reviewing the draft text in closed-door sessions on March 23 and 24, 2026.

Next Steps: The bill must pass a markup in the Senate Banking Committee, potentially in late April, before it can move to the Senate floor.

Remaining Hurdles: Negotiators still need to resolve issues regarding DeFi provisions, anti-money laundering obligations, and ethics language concerning government officials' crypto holdings.

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