Progress on major U.S. cryptocurrency market structure legislation is advancing toward a key committee review, though a significant dispute over stablecoin rewards continues to delay final action. Paul Grewal, Chief Legal Officer of Coinbase, stated in a recent interview that the U.S. Digital Asset Market Clarity Act (CLARITY Act) is “moving toward” a markup hearing in the Senate Banking Committee. A markup is a session where lawmakers debate, amend, and vote on whether to send a bill to the full Senate for consideration. Grewal indicated that if senators can resolve the central conflict over stablecoin yield, the bill could proceed to a floor vote.
Speaking on Fox Business, Grewal expressed optimism that a compromise is near. “I think we’re very close to a deal on the core elements of the market structure bill,” he said, acknowledging that the debate over whether platforms can offer yield on stablecoin holdings remains the primary hurdle. This dispute has been the cited reason for postponing the Senate Banking Committee’s markup, originally scheduled for January and now without a new date. The House of Representatives passed its version of the CLARITY Act on July 17, 2025, creating pressure for Senate action.
The Stablecoin Yield Standoff
The core disagreement centers on whether stablecoin issuers or cryptocurrency exchanges should be permitted to offer yield—essentially, interest-like rewards—to users who deposit their stablecoins. The banking industry has lobbied aggressively for restrictions, arguing that such products could lure deposits away from traditional banks, potentially destabilizing the financial system. Groups like the American Bankers Association have raised concerns about regulatory arbitrage and consumer protection risks.
Grewal directly countered this argument, stating there is no empirical evidence to support the “deposit flight” fear. “The idea that this is somehow a threat to the banking system is not borne out by the facts,” he asserted. He framed the yield issue as a matter of competition and innovation, suggesting that restrictions would protect incumbent banks at the expense of consumer choice and crypto market development. This position aligns with the broader crypto industry’s view that yield-bearing stablecoins are a legitimate financial product that should operate under clear, tailored rules.
Political Pressure from the White House
The legislative delay has drawn public attention from the highest levels. Last month, President Donald Trump accused traditional banks of obstructing the bill, writing on social media: “The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage.” The “Genius Act” refers to a separate, broader stablecoin bill. This statement followed a private meeting between Trump and Coinbase CEO Brian Armstrong, reported by outlets like Politico, highlighting the administration’s desire to see crypto legislation enacted.
Armstrong had previously stated in January that Coinbase could not support the market structure bill “as written,” specifically citing draft provisions that would ban stablecoin rewards and grant banks new powers to restrict competition. His public stance, combined with the President’s criticism, underscores how the stablecoin yield debate has become a proxy fight between the crypto industry and parts of the traditional financial sector.
Risks of Inaction: A Warning from Policy Experts
With the bill stalled, advocates warn that the crypto industry faces significant long-term risks. Peter Van Valkenburgh, Executive Director of the policy-focused nonprofit Coin Center, cautioned last week that failure to pass the CLARITY Act could leave the sector vulnerable to a more aggressive regulatory crackdown under a future administration. The CLARITY Act includes key provisions that would create clear definitions for digital assets, limit the SEC’s jurisdiction over certain tokens, and provide developer protections for decentralized protocols.
Van Valkenburgh argued that rejecting these structural reforms in favor of short-term compromises—like a total ban on yield—would be a strategic error. “The point of passing CLARITY is not to trust this administration. It is to bind the next one,” he said, emphasizing the need for durable statutory law to prevent regulatory whiplash based on political shifts. This perspective frames the legislation not as a favor to the current industry, but as a foundational step for legal certainty.
As negotiations continue, the stablecoin yield dispute remains the linchpin. The outcome will signal whether U.S. crypto policy moves toward integrated innovation or maintains a fragmented, banking-favoring status quo. All eyes are now on the Senate Banking Committee to schedule a markup and broker a resolution.
Note: Coinbase’s stock (NASDAQ: COIN) has declined approximately 23% year-to-date as of the latest market close, according to Yahoo! Finance data. This article is based on public statements, reported meetings, and legislative records. Readers are encouraged to review the full text of the CLARITY Act and follow official committee schedules for updates.
