A tentative bipartisan agreement on stablecoin yield is circulating in Washington, potentially breathing new life into a major piece of cryptocurrency legislation. Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, both members of the Senate Committee on Banking, Housing, and Urban Affairs, have reached what is being described as an agreement in principle, according to a report by Politico. Specific terms of the prospective deal have not yet been made public, and Senator Tillis has indicated the crypto industry must review the agreement before it can be finalized.
Senator Alsobrooks described the deal as a way to balance competing priorities in the debate over digital assets. She said the agreement is designed to protect innovation while also preventing widespread deposit flight from traditional financial institutions. Notably, she added that the deal prohibits stablecoin yield on passive balances, a key point of contention in recent negotiations.
The Digital Asset Market Clarity Act of 2025, commonly referred to as the CLARITY Act, is a sweeping piece of crypto market structure legislation that had been widely expected to advance smoothly following the passage of the GENIUS stablecoin framework. However, the bill encountered significant resistance in January after prominent industry participants, including crypto exchange Coinbase, raised concerns about whether stablecoin issuers should be permitted to share yield with token holders. Those objections effectively stalled the bill’s progress.
At the DC Blockchain Summit on Wednesday, Wyoming Senator Cynthia Lummis, a prominent advocate for digital asset policy in Congress, expressed optimism about the bill’s prospects. She stated that lawmakers are very close to passing a comprehensive crypto regulatory framework. A spokesperson for Senator Lummis told Cointelegraph that a deal is expected to emerge within the next few days, and that the senator is currently focused on finalizing ethics language within the bill.
The banking industry has been a vocal opponent of yield-bearing stablecoins, arguing that such products could trigger a flight of deposits away from traditional banks. Banks currently offer deposit yields well below one percent, and industry representatives have warned that regulated stablecoins offering higher returns could erode their market share. These concerns have added a layer of complexity to the legislative negotiations.
Patrick Witt, the executive director of the White House Council of Advisors for Digital Assets, has pushed back on those concerns, characterizing them as overstated. Witt argued that legalizing and regulating dollar-pegged yield-bearing stablecoins would likely attract a new wave of capital into the US banking system rather than drain it. Cointelegraph reached out to the White House for additional details on the prospective deal but had not received a response by the time of publication.
Originally reported by CoinTelegraph.
