CLARITY Act Heads to Senate Markup as Stablecoin Rewards Compromise Tries to Calm Bank Deposit Fears
By Axel Miller | 14 Jan 2026
The Senate Banking Committee is scheduled to mark up the Digital Asset Market CLARITY Act on January 15, 2026, after Chairman Tim Scott (R-S.C.) released a finalized bipartisan draft late Tuesday.
The bill is the most significant U.S. legislative effort so far to establish a federal crypto market structure framework — defining the boundaries between the SEC and the CFTC, while also tackling one of the most contested policy battles in Washington’s digital asset debate: stablecoin rewards.
The “Alsobrooks Compromise” becomes the business flashpoint
A key hook of the latest draft is the “Alsobrooks Compromise,” language proposed by Senator Angela Alsobrooks (D-MD) to separate stablecoin rewards into two categories:
- idle yield (restricted): platforms would be prohibited from paying interest-like returns simply for holding stablecoin balances
- activity-linked incentives (permitted): rewards may still be allowed when tied to actions such as making payments, staking participation, or loyalty programs
The distinction is designed to satisfy concerns raised by banking groups — including community banking advocates — that yield-bearing stablecoins could behave like deposit substitutes and accelerate deposit outflows from traditional savings products.
Banking vs crypto: deposit stability vs innovation
At the heart of the standoff is whether stablecoin rewards represent:
- a competitive innovation in digital payments and finance, or
- a bank-like product operating outside bank-style oversight
Banking groups have lobbied aggressively against stablecoin yields, arguing they could encourage deposit flight and raise consumer risk if stablecoin platforms function like quasi-savings accounts without the same supervisory regime.
Crypto firms argue that blanket restrictions risk freezing innovation and effectively giving incumbent financial institutions a protective regulatory moat.
Industry response: Blockchain Association attacks “bad faith” lobbying
Crypto advocates welcomed movement toward statutory clarity but warned against bank-aligned provisions that could restrict legitimate incentive structures.
In a statement released on January 13, Summer Mersinger, CEO of the Blockchain Association and a former CFTC Commissioner, accused large financial institutions of resisting competition.
“Big banks are acting in bad faith,” Mersinger said, referring to the stablecoin reward fight.
Why it matters: CLARITY is the “market structure” sequel to stablecoin law
Supporters describe the bill as the broader follow-on to stablecoin-specific legislation, building the regulatory perimeter around:
- trading platforms and exchanges
- registration requirements
- token classification boundaries
- SEC/CFTC jurisdiction clarity
In practical terms, stablecoin legislation addresses “what stablecoins are,” while the CLARITY Act addresses “how the market they trade in is governed.”
Election-year pressure: White House wants results by Q1
The bill is advancing amid heightened pressure in Washington’s 2026 election-year environment.
The Trump administration has publicly positioned itself as pro-crypto and pro-innovation, and policymakers involved in the negotiations are pushing to accelerate the timeline, aiming to secure a floor vote within the first quarter of 2026.
Summary
The Senate Banking Committee is scheduled to mark up the Digital Asset Market CLARITY Act on January 15, 2026, after Chair Tim Scott released a finalized bipartisan draft. A key feature is the “Alsobrooks Compromise,” which would ban interest-like rewards for idle stablecoin holdings while allowing incentives tied to active usage such as payments or staking participation. The provision is designed to address bank concerns about deposit flight, while crypto advocates warn against rules that mirror bank-style restrictions. The bill is also being pushed under election-year pressure, with the White House seeking a pro-tech legislative win in early 2026.
Frequently asked questions (FAQs)
Q1: What is the CLARITY Act?
The Digital Asset Market CLARITY Act is a market-structure bill designed to regulate crypto trading and define the roles of the SEC and CFTC in overseeing digital assets.
Q2: What is the “Alsobrooks Compromise” on stablecoin rewards?
It would restrict interest-like rewards for holding idle stablecoin balances, while still allowing incentives tied to active usage such as payments, staking participation or loyalty programs.
Q3: Why are banks lobbying against stablecoin yield?
Banking groups argue yield-bearing stablecoins could encourage deposit outflows from banks and create deposit-like products outside bank supervision.
Q4: Does the bill ban stablecoin rewards completely?
No. The draft framework targets idle yield-style payouts while preserving room for certain activity-linked rewards, depending on final definitions and enforcement standards.
Q5: What happens after markup?
After committee markup, the bill must progress through the full Senate, potentially reconcile with House legislation, and then be signed into law to take effect.