US Congress · CLARITY Act · Coinbase · CryptoSlate
Banks pushed Congress to kill stablecoin yield with CLARITY Act, Coinbase may have found the loophole
Compiled by KHAO Editorial — aggregated from 2 sources. See llms.txt for citation guidance.
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For traditional US banks, the CLARITY Act was intended as a firewall that effectively barred crypto companies from offering “passive” interest on stablecoins.
Key facts
- US commercial bank deposits stood at roughly $19.3 trillion in late May 2026, and money-market fund assets sat at $7.78 trillion
- The firm also stated that it held an average of about $19 billion in USDC across its products, accounting for more than 25% of the total USDC in circulation
- Coinbase also confirmed its expanded role, noting it will support security and operations across more than $5 billion in Ethena assets
- Coinbase x Ethena is bullish because it can turn Coinbase’s ~$19B USDC base, with an implied ~$13B of reward-earning balances, into a funding rail for Ethena
Summary
01 Coinbase is pairing with Ethena to route idle USDC into activity-based yield, not passive stablecoin interest. 02 The move could let Coinbase keep stablecoin rewards flowing while the CLARITY Act tries to shield bank deposits from crypto competition. 03 Banks still face pressure if users chase higher Coinbase yields, and lawmakers may test whether the arrangement fits Section 404. The legislation aimed to prevent a catastrophic deposit flight in which everyday checking account balances drain from the banking system into high-yield crypto exchanges.