French Hill Pushes for Stablecoin Yield Ban in CLARITY Act Amid Senate Uncertainty

House Financial Services Committee Chairman French Hill is urging the Senate to ban stablecoin yields in the CLARITY Act, arguing the move is essential for achieving the bipartisan support needed to pass the legislation. Speaking on FOX Business, Hill emphasized that stablecoins function primarily as payment tools on blockchain networks rather than yield-generating instruments, echoing the framework already established in the House-passed GENIUS Act.

Hill pointed out that both the GENIUS Act and CLARITY Act cleared the House on a bipartisan basis largely because lawmakers agreed stablecoins should not pay yield. He believes the Senate can resolve the ongoing yield debate by adopting a similar approach, and suggested that broader questions around whether bank and non-bank stablecoin issuers should offer rewards be addressed through U.S. Treasury regulatory guidance tied to GENIUS Act implementation.

The issue sits at the center of a growing conflict between traditional banks and the crypto industry over whether third-party firms should be permitted to distribute stablecoin rewards to users. The White House has proposed draft language that would restrict stablecoin rewards to specific transaction types while prohibiting balance-based rewards. White House crypto advisor Patrick Witt has accused banks of weaponizing the CLARITY Act to stifle competition.

Despite the push, experts remain skeptical. Austin Campbell of Zero Knowledge Consulting warned that legislation caught between powerful competing interests, like banks and crypto firms, rarely advances smoothly through the Senate. Senate Majority Leader John Thune also indicated the bill is unlikely to clear committee before April, with Republicans currently prioritizing the Save America Act. President Trump has reportedly threatened to withhold his signature from any legislation until that bill passes first.

Reflecting the mounting uncertainty, Polymarket prediction odds for the CLARITY Act becoming law in 2025 have slipped to 55%, signaling that crypto traders are growing less confident in a near-term resolution.