Sen. Thom Tillis (R-N.C.) has put forward what he’s calling a final amendment to the Digital Asset Market Clarity Act, targeting one of the thorniest issues in crypto regulation: whether stablecoins should be allowed to offer yields that look, smell, and function like traditional bank deposits.

The answer, according to the compromise Tillis finalized with Sen. Angela Alsobrooks (D-Md.), is no. At least not the passive, sit-back-and-collect-interest kind. The amendment prohibits “covered parties” from offering interest or yield on stablecoins that is “economically or functionally similar” to traditional bank deposits for US customers.

The deposit flight problem

The American Bankers Association has been one of the loudest voices in the room, pushing for language tight enough to close any potential loopholes. As of May 2026, the ABA has requested additional technical refinements to the bill’s language to ensure that the prohibition actually holds up in practice.

The Tillis-Alsobrooks compromise draws a line between passive yields on idle stablecoin holdings, which would be banned, and activity-based rewards, which would still be permitted. Coinbase has been vocal about the need to preserve the ability to reward users for holding stablecoins on their platform, even as the company has signaled support for the broader compromise.

How the deal came together

Tillis and Alsobrooks first reached an agreement in principle on the stablecoin yield question around March 20, 2026. Tillis held additional discussions regarding draft language in mid-April 2026 before the final text was locked down around May 1-2, 2026.

Coinbase Chief Legal Officer Paul Grewal has expressed confidence that the Clarity Act could pass before the summer of 2026. The Senate markup process still has unresolved issues to work through, including ethics provisions and concerns about decentralized finance and illicit finance risks.

Market reaction and investor implications

Circle’s stock rose approximately 20% following the announcement of the negotiation outcomes. Coinbase saw a more modest but still meaningful 6% increase.

For traditional banks, the compromise represents a partial victory. They’ve secured protection against the most direct form of deposit competition from crypto, but the activity-based rewards carve-out means stablecoins will still compete for user attention and wallet share. The ABA’s ongoing push for technical refinements suggests the banking lobby isn’t entirely satisfied with the current language.

Institutional investors watching this space should pay close attention to three things. First, whether the Senate markup resolves the remaining open issues around DeFi and illicit finance quickly enough to maintain legislative momentum. Second, how individual stablecoin issuers restructure their reward programs to comply with the new framework. And third, whether the House produces compatible legislation or introduces its own complications.