TLDR Tech / Crypto
Banks May Have Won the Yield Battle, But They Will Lose the War
The CLARITY Act's final stablecoin language, now headed to the Senate Banking Committee markup under Senators Tillis and Alsobrooks, bars digital asset service providers, including exchanges, brokers, and affiliates, from paying interest or yield on payment stablecoins, with an 'economically or functionally equivalent' test closing indirect workarounds. Banks secured real concessions: centralized platforms lose the direct yield path, and new compliance and disclosure requirements add overhead. The prohibition leaves DeFi protocols, foreign issuers, and dollar settlement migration to onchain rails untouched, meaning the infrastructure contest for programmable dollar movement continues outside the regulatory perimeter that banks just reinforced.
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