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In Today's Edition:
Headline: Clarity Act Yield Deal Unblocks Senate Markup
Global Legal Roundup
Case Study: CFTC Sues Wisconsin Over Prediction Markets
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HEADLINE
Clarity Act Yield Deal Unblocks Senate Markup
State of play: Sens. Tillis and Alsobrooks finalized the long-stalled stablecoin yield compromise Friday, clearing a path for the Senate Banking Committee to mark up the Clarity Act.
Section 404 bars crypto firms from paying interest "economically or functionally equivalent" to a bank deposit, but carves out activity-based rewards tied to bona fide platform usage.
Permitted rewards can be calculated by balance, duration, or tenure, giving platforms flexibility to design programs that look much like yield in practice.
The SEC, CFTC and Treasury must jointly write rules within a year defining qualifying activities, expected to include payments, staking, market-making and loyalty programs.
Coinbase, which booked $1.35B in stablecoin revenue in 2025 mostly via USDC rewards, called for an immediate markup; CEO Brian Armstrong's reaction was "Mark it up."
Banking regulators must report to Congress within two years on stablecoin impact on deposits, giving the bank lobby a built-in opening to reopen the fight.
What’s Next: Chair Tim Scott has yet to set a markup date, and the bill still needs to be reconciled with the Agriculture Committee's draft and the House's Clarity Act before reaching Trump's desk.
Why it Matters: It unblocks the broader market structure bill stuck since January and sets the template for how stablecoin economics work in the US.
Our Take: "No yield, but rewards calculated by balance and duration" is a fig leaf, since that's functionally how interest works. Banks lost the substance and won the optics.
GLOBAL LEGAL ROUNDUP
America:
🇺🇸 Crypto market structure bill nears May push.
🇺🇸 Gemini secures Derivatives Clearing Organization license.
🇺🇸 BlackRock urges OCC to drop tokenized reserve cap idea.
🇺🇸 Coinbase says deal reached on Clarity Act stablecoin yield.
🇺🇸 White House advisor hints on Trump’s strategic BTC reserve.
🇺🇸 FBI leads arrests of 276 in global crypto 'pig butchering' scams.
🇺🇸 Senate moves to ban themselves from prediction market trading.
🇺🇸 US court sentences Cartier descendant to 8 years in $470M crypto case.
🇺🇸 CFTC sues Wisconsin escalating federal-state clash over prediction market.
🇺🇸 a16z backs CFTC, says state-by-state rules on prediction markets create barrier.
🇨🇦 Canada moves to ban crypto ATMs, labeling them as method for fraud.
🇧🇷 Brazil central bank prohibits crypto use in regulated cross-border payments.
Europe:
🇨🇿 Czech central bank governor makes case for BTCin sovereign reserves.
APAC:
CASE STUDY
CFTC Sues Wisconsin Over Prediction Markets
State of play: The CFTC sued Wisconsin's governor, attorney general, and gaming administrator on Tuesday, escalating a federal-state fight over who regulates prediction markets.
The suit follows Wisconsin's complaints last week against Coinbase, Robinhood, Crypto.com, Polymarket, and Kalshi for offering sports event contracts it calls a "public nuisance."
This is the fifth state the CFTC has sued in a month, after Illinois, Arizona, Connecticut, and New York, asserting "exclusive jurisdiction" over event contracts.
A bipartisan coalition of 37 state AGs filed an amicus brief last week backing Massachusetts' ruling that Kalshi needs a state license to offer sports contracts.
CFTC Chair Michael Selig is pursuing rulemaking and arguing the agency's statute is broad enough to preempt state gambling laws.
The agency is asking the Wisconsin court for an injunction declaring state gambling bans preempted by federal law as applied to CFTC-regulated event contracts.
Our Take: "Exclusive jurisdiction" over swaps was never written with sports betting in mind, and 37 AGs lined up against the CFTC is a serious political signal. Selig is racing to lock in jurisdiction before courts or Congress force a narrower read.
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