Senate Compromise on CLARITY Act Sparks Crypto Market Rally

U.S. Senators Thom Tillis and Angela Alsobrooks negotiated a compromise on the Digital Asset Market Clarity Act (CLARITY Act) to end a months-long deadlock over stablecoin rewards. The revised language prohibits cryptocurrency firms from offering interest-like returns on passive stablecoin holdings to protect traditional bank deposits, but allows incentives tied to active platform usage, such as trading, payments, and staking.

Tim Scott, Chairman of the Senate Banking Committee, stated his goal is to hold a bipartisan markup in May to bring the bill to the Senate floor. The agreement prompted Coinbase to support the framework and triggered a market rally where Bitcoin briefly surpassed $80,000. Shares of Circle Internet Group rose approximately 20% to $119.53 on May 4, 2026, while other firms including BitGo and Galaxy Digital also saw positive movement.

Bank of America described the resolution of the yield debate as a net positive that reduces regulatory uncertainty and mitigates deposit flight. However, the American Bankers Association continues to urge regulators to tighten definitions to prevent indirect yield loopholes. Coinbase Chief Policy Officer Faryar Shirzad defended the compromise, asserting that it protects the ability of Americans to earn rewards based on actual network usage.