On September 15, the U.S. Senate will hold a vote. This vote could directly slash the stablecoin yields in your hands.
On August 19, the American Bankers Association publicly stated: they support the passage of the CLARITY Act but insist on tightening the stablecoin reward provisions before the September vote.
ABA President Rob Nichols said: The bill should prohibit stablecoin reward mechanisms that are "substantially similar" to interest payments.
In plain language: the 3.5% reward your platform gives me looks too much like bank interest, so it has to be killed.
Why are banks so anxious?
Because money is flowing out.
The average U.S. bank deposit interest rate is only 0.1%. Meanwhile, Coinbase offers USDC holders a 3.5% reward.
That's a 35 times difference.
Banks are panicking. They rely on these deposits to issue small business loans, mortgages, and agricultural financing. With stablecoins yielding 3.5% annually, who would still put money in banks?
So the ABA is lobbying hard to broaden the definition of "substantially similar" — broad enough to ban any reward that "looks like interest."
But there is a more subtle issue behind this.
The GENIUS Act passed in 2025 already prohibits stablecoin issuers from directly paying interest or yields to holders.
But there is a loophole — the law does not regulate "third-party platforms."
So Coinbase exploited this gap: I am not the issuer, just a platform; the 3.5% I give users is called a "platform reward," not "interest."
The CLARITY Act aims to seal this loophole completely.
Section 404 of the draft clearly states: any regulated entity shall not directly or indirectly pay any form of interest or yield to holders — solely because they hold stablecoins.
"Any regulated entity" and "directly or indirectly" — Coinbase cannot escape.
Two scenarios, consider them yourself:
🔴 Risk scenario (ABA amendment passes)
"Substantially similar" is broadly interpreted
Coinbase and other platforms’ USDC 3.5% rewards are cut
Impact: all users holding stablecoins on centralized exchanges
🟢 Optimistic scenario (amendment rejected)
Retain "activity-based" reward mechanisms (staking, trading, and other real behaviors)
USDC yield model continues
Coinbase’s $1.35 billion stablecoin revenue in 2025 remains unaffected
Key timeline:
September 15: Senate procedural vote, needs 60 votes to advance
September 18: Cloture vote to end debate
Before then: ABA is lobbying hard for the amendment
Trump has publicly urged Congress to pass the CLARITY Act. Coinbase CEO predicts it may get over 60 votes in favor.
My strategy:
No extreme position adjustments before September 15 — but closely monitor the Senate Banking Committee’s amendment text.
If the definition of "substantially similar" is too broad — consider moving some stablecoins to on-chain protocols not subject to U.S. regulation.
⚠️ This is not financial advice, just analysis.
Banks say stablecoin rewards "weaken their lending capacity."
But the question is — why are you making choices for me?
The 3.5% yield is my choice; I don’t need you to "protect" me.
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