CryptoSlate
Coinbase and Ethena are exploring a structure that would turn idle USDC balances into activity-based yield, potentially offering stablecoin holders a return that survives the CLARITY Act's ban on passive rewards. The push comes as banks lobby Congress to eliminate yield on stablecoins altogether, a fight the CLARITY Act is now carrying forward.
Why it matters
The CLARITY Act, as currently drafted, would bar issuers and affiliates from paying interest or yield on stablecoin balances — a concession to bank lobby groups that argue yield-bearing stablecoins threaten traditional deposit bases. Coinbase and Ethena's proposed structure would route yield through user-level activity rather than passive holding, a distinction that may sit just outside the statute's text.
Market impact
If the structure holds, it preserves a meaningful revenue lever for USDC and gives Ethena an on-chain distribution channel into Coinbase's retail flow. Watch the CLARITY Act's yield language in committee markups — the line between "passive" and "activity-based" reward is where the next fight is going to land.
Frequently asked questions
-
What is the CLARITY Act's stance on stablecoin yield?
As currently drafted, the CLARITY Act would bar issuers and affiliates from paying interest or yield on stablecoin balances — a concession to bank lobby groups that argue yield-bearing stablecoins threaten traditional deposit bases.
-
How would Coinbase and Ethena's structure bypass the ban?
Their proposed design routes yield through user-level activity rather than passive holding, a distinction that may sit just outside the statute's text banning passive rewards.
-
Why are banks pushing to ban stablecoin yield?
Banks argue that yield-bearing stablecoins compete directly with traditional deposit products and could pull balances away from the regulated banking system.
-
What does Ethena gain from the Coinbase partnership?
If the structure holds, Ethena gets a distribution channel into Coinbase's retail flow for its on-chain yield product, while USDC preserves a revenue lever issuers would otherwise lose.
-
What should investors watch next in the CLARITY Act process?
Watch the yield language in committee markups. The line between passive and activity-based reward is where the next legislative fight is likely to land.
CoinTelegraph
Altcoin Daily
Crypto Capital Venture
TheBlock
WuBlockchain