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The Clarity Act has split the crypto industry as Coinbase opposes its stablecoin yield ban while Frax Finance backs the passage of the broader bill. Coinbase told Senate offices it cannot support the latest draft because of the yield language. Frax Finance founder Sam Kazemian said the industry should accept the compromise, pass market structure rules, and revisit yield in a later cycle. The dispute reflects different business models, Senate timing, and what each side stands to gain or lose.
Coinbase has now rejected the latest Clarity Act draft for the second time. The company cited major concerns over language that would ban stablecoin yield tied to deposit-like returns. Crypto Banter founder Ran Neuner publicly supported Coinbase’s position. He said banks pushed for the restriction after years of failing to innovate, and that crypto ended up paying the price.
Kazemian took a different path. Speaking on The Rollup’s Stabled Up podcast this week, he said the crypto industry is treating the compromise as final when the political process is still moving.
He said legislative negotiations do not end in one round. Instead, he argued that the industry should secure the larger market structure bill first, then return to the yield issue later.
This approach centers on durability. Kazemian said SEC or CFTC guidance can change with a new administration, while a law passed by Congress is much harder to reverse.
So the divide did not emerge from one simple policy disagreement. It grew from how different firms assess timing, risk, and the value of getting a broader bill over the line.
Kazemian said the yield ban does not affect every company in the same way. He pointed to Tether as one firm that would not face direct pressure from the current wording.
Tether has never paid passive yield to holders. This would prevent the ban from disrupting its model, while rivals could lose one way to narrow the gap through yield-sharing arrangements.
For DeFi-native teams, Kazemian said the surviving activity-based yield carveout already matches how they operate. In that case, the compromise changes little about their current structure. The same logic cuts the other way for Coinbase. Stablecoin revenue accounted for about 19% of Coinbase’s total revenue in the third quarter of 2025.
Also Read: Crypto Market Update: Delaware Stablecoin Bills Aim to Reshape State Asset Rules
The Clarity Act’s ban on anything economically equivalent to deposit interest would directly affect that setup. This helps explain why Brian Armstrong earlier said Coinbase would rather have no bill than a bad one.
Would the industry gain more by locking in market structure law now, or lose too much by accepting limits on stablecoin yield?
Kazemian said Armstrong remains the loudest crypto voice in the debate, yet he does not decide the bill’s fate. Senators will weigh pressure from both the banking lobby and the crypto industry.
This makes timing a central issue. If the Clarity Act does not pass before Congress leaves for recess ahead of the midterm cycle, movement may stall until 2027. Polymarket currently puts the chance of the bill becoming law this year at 49%. The Senate Banking Committee plans to mark up the bill in the second half of April, following the Easter recess, which concludes on April 13.
This timetable frames the split in practical terms. Kazemian wants the industry to take the deal now and revisit yield in the next cycle.
Armstrong’s position remains just as direct. He says the current text is not acceptable, and this stance aligns with the revenue line most exposed by the bill.
The Clarity Act has divided crypto firms as Coinbase rejects the stablecoin yield ban while Frax Finance supports passing the broader bill first. The dispute reflects different revenue models, Senate timing, and the urgency of turning crypto market structure into law before the legislative window narrows.
