Senator pushes Clarity Act forward as stablecoin yield fight nears markup

U.S. Senator Thom Tillis is trying to haul the long‑stalled CLARITY Act into a Senate Banking markup that would simultaneously settle Washington’s stablecoin‑yield fight and advance Cynthia Lummis‑backed protections for non‑custodial crypto developers.

U.S. Senator Thom Tillis is pushing to move the long-debated CLARITY Act into the Senate Banking Committee’s formal review process, setting up a decisive fight over how Washington will treat stablecoin yield and crypto developers. Crypto journalist Eleanor Terrett wrote on X that Tillis plans to “push the Clarity Act into the Senate Banking Committee’s markup stage as soon as possible,” adding that he told colleagues there is now “a significant consensus” on the path forward.

Speaking in Congress, Tillis said he will ask the committee chair to schedule a hearing after the upcoming congressional recess and pledged to publish updated legislative text on stablecoin yield “four to five days” before that session so industry and other stakeholders can review it in advance. He emphasized that “most concerns from the banking sector regarding the risks associated with stablecoin yield have been addressed” in recent negotiations and urged any institutions with remaining objections to “participate in good faith to improve the legislation.”

Those comments land after weeks of behind-the-scenes talks in which banks and crypto firms have clashed over whether paying yield on stablecoin balances should be tightly constrained or allowed under certain conditions, a dispute that has already delayed markup once. As FinTechWeekly reported, draft compromise language Tillis previously circulated would prohibit digital asset providers from offering yield “directly or indirectly on stablecoin balances” in ways that are economically equivalent to bank interest, while still permitting narrowly defined, activity-based rewards tied to payments or platform use.

Lummis framework and developer protections

In his latest remarks, Tillis also said he “generally supports” the legislative framework advanced by Senator Cynthia Lummis on issues such as the potential impact of applying 1960 criminal provisions to software developers and law enforcement’s role in crypto enforcement. That is a reference to concerns around 18 U.S.C. § 1960, the federal money-transmitting statute that some regulators have interpreted broadly enough to cover non‑custodial code, a reading Lummis has warned could “criminalize Americans offering non-custodial crypto asset software services,” according to a 2024 letter from her office.

Lummis and allies have pushed for clear protections for “non-controlling developers” who write or update open-source blockchain software without ever taking custody of user funds, arguing they should not be treated as money transmitters, while law enforcement continues to target actors that actually run financial services. A February proposal described by Cryptopolitan would codify that distinction so that only entities with actual control over customer assets face licensing and criminal exposure.

Taken together, Tillis’s comments signal that U.S. crypto legislation is moving into a more substantive phase on two fronts: defining what kinds of stablecoin rewards are permitted, and drawing a line between protocol developers and intermediaries that handle money. In a previous crypto.news story, market commentators warned that unresolved U.S. rules around yields and custody were already weighing on product design, while another crypto.news story underscored how regulatory clarity could help bridge the gap between on-chain signals and institutional participation in assets like Bitcoin.