The Senate Banking Committee reached a compromise on the CLARITY Act that preserves a ban on stablecoins paying yield to holders. Bank trade groups, having pushed hard against the bill entirely, are being warned by industry observers that rejecting the compromise could produce worse outcomes if a less friendly version advances later. The yield-ban provision was a key concession to depository institutions worried about deposit substitution.
For Armada's crypto repo desk, the yield-ban distinction matters: tokenized T-Bills used as collateral generate yield structurally differently than a yield-bearing stablecoin, but regulatory language could blur that line. Legal counsel should review whether CLARITY Act definitions touch repo collateral mechanics or client structures involving tokenized instruments.