The U.S. Senate Banking Committee released the final text of the bipartisan 'Clarity for Stablecoins Act' compromise bill on Friday, establishing for the first time a legal framework permitting regulated stablecoin issuers to distribute yield to token holders. The legislation — co-sponsored by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) ��� is expected to advance to a full Senate floor vote by late May, with House companion legislation already in markup.
Under the framework, federally-chartered stablecoin issuers that maintain 100% reserves in Treasury bills and cash equivalents may pass through up to 80% of net interest income to holders, subject to enhanced disclosure requirements, AML/KYC compliance at the issuer level, and FDIC-modeled resolution planning. Circle (USDC issuer) and PayPal (PYUSD) are considered the primary immediate beneficiaries, while Tether (USDT) — incorporated offshore — would need to establish a U.S. subsidiary to qualify.
Market Sizing
The combined stablecoin market currently stands at approximately $218 billion, with Tether USDT at $148 billion, Circle USDC at $54 billion, and others comprising the remainder. If yield were passed through at current T-bill rates (approximately 3.5% net), the aggregate annual distribution would exceed $7.5 billion — creating a powerful incentive for capital migration from traditional money market funds into yield-bearing stablecoins. Bernstein estimates the addressable market could grow to $500 billion within 24 months of legislation passing.
Crypto Equity Beneficiaries
Coinbase Global (COIN) — which earns approximately 50% of USDC net interest income through its Circle partnership — traded up 2.4% Friday before the Monday selloff. Under the current arrangement, Coinbase earns approximately $1.2 billion annually from