CLARITY Act Shifts to Stablecoin Yield Ban: Who Holds the Initiative in the Digital Dollar Economy?

As Senator Cynthia Lummis referred to April 2026 as a 'historic moment' for the CLARITY Act, the debate over stablecoins is expanding beyond simple regulatory compliance into a battle for economic dominance of the digital dollar. With the stablecoin market capitalization hitting an all-time high of $317 billion in the first quarter of 2026, the Senate Banking Committee's focus has shifted to a core question: if token holders are legally prohibited from receiving yields, who is entitled to the massive interest income generated from the reserves backing those tokens?

Washington is transforming stablecoins into regulated payment instruments while simultaneously blocking yields paid by issuers from being passed on to holders. This combination fundamentally alters the economic structure of the digital dollar, creating a system where intermediaries can capture the value of user balances.

The CLARITY Act currently under discussion is moving toward strictly limiting the payment of interest to stablecoin holders. This is seen as more than just a consumer protection measure; it is expected to result in the redistribution of billions of dollars in interest income, or 'float,' from token holders to financial intermediaries. Particularly as the stablecoin market expanded rapidly as of March 2026, the destination of these yield rights has become a life-or-death struggle between traditional finance and the virtual asset industry.

April Offensive: Imminent Senate Passage of the CLARITY Act

The CLARITY Act has already passed the House and is currently undergoing an active review process in the Senate. Senator Lummis emphasized that April 2026 would be a watershed moment in this legislative process, suggesting that the bill's passage is imminent. The Senate Banking Committee is reviewing more than 100 amendments and fine-tuning the details of the bill, which is expected to be a decisive step in establishing the structure of the U.S. digital asset market.

• Upcoming release of Senator Thom Tillis's revised provisions regarding stablecoin yields
• Announcement of the markup date by Chairman Tim Scott
• Senate Banking Committee's final vote and decision on the adoption of amendments

The yield ban provision draws a clear structural line in the market. According to the released draft, digital asset service providers, including exchanges, brokers, and affiliates, are prohibited from directly or indirectly providing yields on stablecoin balances. This is interpreted as an intention to fundamentally block stablecoins from competing with traditional bank deposits, while following the stance of the existing GENIUS Act, which stipulated a 1:1 reserve requirement.

Behind this regulatory movement lies strong lobbying from the traditional banking sector. More than 3,200 banks sent a letter to the Senate demanding that the yield ban provision be extended not only to stablecoin issuers but to all virtual asset services. The banking sector is concerned about a 'deposit flight' scenario, where yield-bearing stablecoins could cause household funds to leak from traditional bank accounts into tokens, thereby hindering banks' lending capacity.

$317 Billion Reward: The Scramble for the Float

The stablecoin market recorded unprecedented growth in the first quarter of 2026. As of March, the total market capitalization reached $317 billion, meaning that massive interest income is being generated from reserves consisting of U.S. Treasuries and cash. Currently, issuers like Tether (USDT) and Circle (USDC) monopolize this 'float' income, with Tether recording an overwhelming profit with a 59.66% market share.

If the yield ban becomes a reality, centralized issuers could see their profitability further strengthened as they will be unable to share reserve income with holders. Conversely, decentralized protocols like Sky (formerly MakerDAO) are expected to face difficulties maintaining their revenue-sharing models under regulatory pressure. As of March 2026, Sky's USDS recorded a market capitalization of $8.38 billion, showing a quarterly growth rate of 20.7%, but this growth could be challenged under the new legislative regime.

Risks of Regulatory Arbitrage and Capital Outflow

Some point out that the strict U.S. yield ban provisions could instead encourage capital flight abroad. According to a report by TRM Labs, Euro (EUR)-based stablecoins saw their trading volume increase 12-fold from January 2025 to March 2026, growing to $777 million per month. This is interpreted as an early move to avoid uncertainty in the U.S. dollar-based payment network, and if the CLARITY Act passes, this offshore flight phenomenon is likely to accelerate further.

Ultimately, the fight over the CLARITY Act boils down to the question of who collects the 'rent' of the digital dollar economy. The yield ban, conducted under the pretext of consumer protection, could ultimately result in protecting the deposit base of the banking sector and solidifying the profit structure of large issuers. As of late April 2026, market participants are closely watching the release of Senator Tillis's amendment and the subsequent committee vote results.