US Stablecoins Regulation and DeFi Yields: CLARITY Act Debate and Policy Impasse

Advocacy groups warn a broad yield ban on stablecoins could curb US innovation and dollar dominance, urging disclosures as CLARITY Act talks stall.

Rich by Coin

2026-02-15

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The Digital Chamber is urging Congress to preserve legislation that would allow payment stablecoins to earn “rewards” through DeFi. The advocacy group warned that a broad yield ban would stifle US innovation and could weaken the dollar’s role in the digital economy. The Chamber warned that removing these exemptions would not only stifle domestic innovation but also undermine dollar dominance. The group posits that if US-regulated stablecoins are legally barred from participating in DeFi markets, global capital will inevitably flow to foreign-issued digital assets or unregulated offshore entities, reducing demand for the US dollar in the digital economy.

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Notably, the banking lobby contends that allowing stablecoins to offer yield without complying with banking capital requirements creates a dangerous arbitrage opportunity. As a proposed compromise, the Chamber suggested mandating clear consumer disclosures to clarify that stablecoin yields are not comparable to bank interest rates and are not FDIC-insured. They argued that high-yield stablecoins would siphon liquidity away from community banks. Negotiations on the CLARITY Act are at a critical impasse after a White House meeting between banking representatives and cryptocurrency executives reportedly ended in deadlock.

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In its latest proposal, the group argued that current CLARITY Act drafts threaten to outlaw the fundamental mechanics of DeFi. The Digital Chamber today releases principles to illuminate a path forward on the stablecoin yield debate, aiming to help the U.S. advance a durable market-structure bill and lead globally in crypto. The provisions distinguish between traditional “interest,” which banks pay on insured deposits, and other interest rates, effectively separating this income from “rewards” derived from liquidity provision on decentralized exchanges. The group argues that empirical data will show stablecoins complement rather than disrupt the traditional banking sector, while regulators may conduct a federal Deposit Impact study two years after the bill becomes law.