Since missing its Jan. 15 markup date and being pushed to the end of the month, the Digital Asset Market Clarity (CLARITY) Act is becoming a proxy fight over who gets to intermediate US dollar yield onchain โ open decentralized finance (DeFi) protocols and payment rails, or a narrow club of large custodians and banks?
With the latest draft tightening how rewards on stablecoins can be offered, critics, including stablecoin issuers and institutional DeFi platforms, warn the bill risks exporting onchain credit offshore rather than making it safer in the United States.
Coinbase revolt highlights mounting industry unease
Coinbaseโs decision to pull support for the bill this week laid bare industry fears that the compromise has tipped too far toward incumbents, the text locking in a punitive model for DeFi and rewards.
Coinbase CEO Brian Armstrong argued that it was better to have โno bill than a bad bill,โ and chief legal officer at Variant Fund, Jake Chervinsky, said that CLARITY was the kind of law that would โlive for 100 years,โ and โWe can take all the time we need to get it right.โ
Related: Coinbase CEO expects market structure bill markup โin a few weeksโ
How CLARITY reshapes onchain dollar yield
Clearpool onchain credit marketplace CEO and co-founder Jakob Kronbichler spoke to Cointelegraph about the CLARITY Actโs โcore riskโ: regulators deciding where yield is allowed to exist, instead of how risk is managed in onchain markets.ย
โDemand for dollar yield wonโt disappear because of legislation,โ he said, arguing that if compliant onchain liquidity structures are constrained, activity is โlikely to move offshore or concentrate in a small number of incumbent intermediaries.โ
Ron Tarter, CEO of stablecoin issuer MNEE and a former lawyer, echoed Kronbichlerโs concerns, telling Cointelegraph, โIf stablecoin rewards are pushed offshore rather than made transparent and compliant onshore, the US risks losing both innovation and visibility into these markets.โ
โThat choice will shape where institutional onchain credit develops over the next decade,โย Kronbichler warned.
Tarter reads CLARITY as drawing a deliberate line between passive, depositโlike interest and activityโbased incentives, adding that the key fulcrum is the phrase โsolely in connection with holding.โ
From his perspective, the bill is trying to mediate between banking groups worried that stablecoin yields could drain deposits and platforms viewing rewards as a core revenue stream and incentive.
Related: Crypto industry split over CLARITY Act after Coinbase breaks ranks
DeFi, developers and the โcontrolโ line
For now, Kronbichler sees one bright spot: CLARITYโs current approach โmakes a sensible distinction by not treating developers of nonโcustodial software as financial intermediaries,โ something he calls critical for innovation and institutional comfort.ย
The real challenge, he argues, is keeping compliance obligations tied to entities that actually control access, custody, or risk parameters, rather than drifting toward general software maintainers who do not. If those lines blur, institutional desks will struggle to assess liability and may simply avoid USโfacing onchain credit products.
Tarter agrees that the developer control test will likely be one of the most contested flashpoints at markup, expecting fierce debate over what qualifies as truly decentralized software and โsituations where a small group can materially control outcomes.โ
Magazine: How crypto laws changed in 2025 โ and how theyโll change in 2026
Honest yield and network activity
Amboss โ data analytics for the Bitcoin Lightning Network โ CEO Jesse Shrader sees a genuine consumer protection problem in rewards โsimply for holdingโ that mask dilution or rehypothecation, pointing to past failures like Celsius and BlockFi.ย
He draws a sharp line between opaque, platformโdefined yields and activity-derived yields, which, he argues, are more transparent from a network design perspective.
For lawmakers looking to preserve that distinction, Shraderโs first ask is simple: require regulated tokens to disclose clearly โthe sources of their yield so consumers can adequately assess their risk.โ
What kind of CLARITY outcome would genuinely protect users without choking compliant onchain dollar markets for everyone involved?
โA light touch from regulators is appreciated,โ Shrader said, while Tarter believes the win comes from US policy protecting users โwithout banning compliant innovationโ (and without locking in a rewards regime that only the largest custodians can afford to navigate).
