SS #99 - Senate Crypto Bill Bans Stablecoin Yield

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The Clarity Act bans stablecoin yield, handing banks a win but drawing immediate fire from both crypto firms and consumer advocates. Whether that tradeoff holds together long enough to survive a markup this week depends entirely on a Democratic ethics compromise that isn't there yet.

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In Today's Edition:

• Headline: Senate Crypto Bill Bans Stablecoin Yield

• Quick Bites: ABA Pushed for Tightened Limits on Stablecoin Rewards

• Yield of the Week: jrUSDat/USDat's 43.06% APY

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HEADLINE

State of play: The Senate Banking Committee released its 309-page Clarity Act late Monday, with language now explicitly banning stablecoin issuers from paying interest or yield to holders, clearing the main technical obstacle that killed the markup in January.

• The Alsobrooks-Tillis language blocks firms from paying any form of interest or yield equivalent on stablecoins, resolving the dispute that caused Coinbase to pull support earlier this year.

• Major bank trade groups pushed back immediately, with the American Bankers Association warning the language would incentivize deposit flight from banks into payment stablecoins.

• The bill is headed for a Senate Banking Committee markup later this week, the first serious vote on federal crypto market structure legislation.

• Ethics provisions around Trump's crypto conflicts remain absent, with Democrats Alsobrooks and Gillibrand both conditioning their support on a compromise being reached before the markup.

• Sen. Warren said the bill would accelerate Trump's crypto corruption, noting his family has made at least $1.4B from crypto ventures with no restrictions in the current text.

What’s Next: Senate Banking Committee markup later this week. No ethics compromise before Thursday means Democrats walk and the July 4 deadline slips.

Why it Matters: First federal bill to explicitly ban stablecoin yield, drawing a hard line between payment stablecoins and interest-bearing deposits that will define market structure for years.

Our Take: The stablecoin yield ban is the real substance. Everything else is noise until the ethics standoff gets resolved, and neither side has shown they'll budge.

QUICK BITES

• BoE's Bailey warns of looming 'wrestle' with US over stablecoin rules.

• S&P 500 payments firm Corpay taps BVNK to add stablecoin wallets.

• ABA CEO makes final-hour push for tightened limits on stablecoin rewards.

• Updated Senate Banking Committee bill tackles stablecoin rewards, DeFi.

• Galaxy-backed Boundary to launch 'verifiable' institutional stablecoin USBD.

YIELD OF THE WEEK

jrUSDat/USDat LP (Pendle): 43.06% APY

• The pool accepts jrUSDat deposits, a junior tranche derivative of sUSDat, with ~$1.06M in pool liquidity and earning 20x Strata and 10x Saturn points.

• Capital is split across jrUSDat SY (~$570k, 53.65%) and PT jrUSDat (~$492k, 46.35%), earning a blended yield from underlying yield, PT yield, and Pendle LP fees plus 258.79 daily PENDLE rewards.

• Yield is generated from Saturn's STRC dividend income amplified through junior tranche leverage, with LP APY composed of 15.02% underlying yield, 7.66% PT yield, and 20.38% Pendle LP fees.

PT avUSD (avUSD) via Pendle: 19.95% APY

• The market accepts avUSD deposits and provides fixed-yield exposure to Avant's yield-bearing stablecoin, maturing May 14, 2026, with ~$12.91M in total liquidity and 1 PT equal to 1 avUSD at maturity.

• Capital is deployed via Pendle Router into the avUSD market, with the PT locking in returns at a fixed rate while YT holders capture remaining variable yield until maturity.

• Yield is generated from Avant's underlying stablecoin strategies, with the PT fixing returns at 19.95% APY while YT holders capture any excess yield above the fixed rate.

sUSDat/USDat LP (Pendle): 17.00% LP APY

• The pool accepts sUSDat deposits and provides liquidity for Saturn's yield-bearing vault token backed by STRC digital credit holdings, maturing August 27, 2026, with ~$9.54M in pool liquidity and earning 10x Saturn points.

• Capital is split across sUSDat SY (~$6.09M, 63.85%) and PT sUSDat (~$3.45M, 36.15%), earning a blended yield from underlying yield, PT yield, and Pendle LP fees plus 336.44 daily PENDLE rewards.

• Yield is generated from Saturn's STRC dividend income passed through to sUSDat holders, with LP APY composed of 8.58% underlying yield, 5.17% PT yield, and 3.24% Pendle LP fees.

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