Take It or Fight It? Clarity Act Has Crypto Divided Into 2 Camps

The proposed stablecoin yield ban within the Clarity Act has ignited significant opposition from prominent figures in the cryptocurrency industry, while others view it as a strategic political maneuver. Coinbase has publicly rejected the latest draft, citing concerns over the stablecoin yield language, marking its second rejection of the bill. Ran Neuner, founder of Crypto Banter, echoed this sentiment, arguing the restrictions unfairly protect an uninnovative banking system.

A Political Process, Not a Final Verdict

Sam Kazemian, founder of Frax Finance, offers a different perspective, characterizing the yield compromise as a phase in an ongoing political process rather than a definitive outcome. He believes the crypto industry is misinterpreting the situation by treating the conversation as concluded. Kazemian advises accepting the current wording to pass the broader bill, with the intention of revisiting the yield debate in a future legislative cycle. He emphasizes that enacting crypto market structure into law is a more significant and lasting achievement than relying on potentially reversible regulatory guidance from the SEC or CFTC.

Unequal Impact of the Yield Ban

Kazemian further argues that the yield ban disproportionately affects certain players, potentially strengthening the position of others. Tether, for instance, has historically not paid passive yield to its holders, making the ban inconsequential to its business model. This change, however, limits rivals' ability to compete by offering yield through platform agreements, thereby enhancing Tether's competitive advantage. For DeFi-native projects, the inclusion of an activity-based yield carveout means the ban has minimal impact on their existing operational models.

Differing Stakes: Coinbase vs. Frax Finance

The divergence in opinions between Kazemian and Coinbase CEO Brian Armstrong stems from their respective business exposures. Stablecoin revenue constituted approximately 19% of Coinbase's total revenue in Q3 2025. The Clarity Act's ban on economic equivalents to deposit interest directly targets this revenue stream, explaining Armstrong's stance that Coinbase would prefer no bill over a detrimental one. Conversely, this situation presents an opportunity for entities not reliant on such yield models.

The Looming Senate Deadline

While Armstrong is a vocal proponent for crypto's side, Kazemian points out that neither industry figures nor lobbyists fully control the outcome; senators hold that power. The more critical factor is the Senate's legislative calendar. If the Clarity Act is not passed before Congress adjourns for its pre-midterm recess, its advancement could be delayed until 2027. Current market sentiment, as reflected on Polymarket, places the odds of the bill being signed into law this year at 49%. The Senate Banking Committee is scheduled to mark up the bill in the latter half of April, following the Easter recess.