Clarity Act compromise splits stablecoin yield into passive vs activity-based rewards. Coinbase withdrew support in Jan, re-endorsed May 1. Senate markup targeted after late May. JPMorgan opposes.
A private Davos confrontation between Jamie Dimon and Brian Armstrong has exposed the fault line in the Clarity Act stablecoin debate. The outcome will decide whether crypto exchanges can offer yield on stablecoins without submitting to bank regulation.
In late January 2026, Dimon and Armstrong met at Davos in a session that also included former UK Prime Minister Tony Blair. The conversation turned hostile. Dimon reportedly accused Armstrong of being “full of s–” over his lobbying strategy for the Digital Asset Market Clarity Act.
The trigger was stablecoin yield. Armstrong had been publicly accusing banks of trying to sabotage provisions that would allow Coinbase (COIN) to offer yield and rewards on stablecoin products without full bank-style regulation. Dimon’s position: if you offer yield, you face the same capital and disclosure requirements as a bank.
That exchange crystallised the regulatory divide. Banks see stablecoin yield as a direct threat to their deposit base. Crypto exchanges see it as a legitimate product that existing law does not cover.
The Clarity Act was designed to create a federal framework for digital asset markets. The stablecoin section became the sticking point. The original text allowed issuers to offer passive rewards – yield paid simply for holding the stablecoin, similar to a savings account.
Coinbase initially supported the bill. In January 2026, it withdrew support specifically because of restrictions on stablecoin yield offerings. That withdrawal stalled Senate Banking Committee discussions.
By May 2026, a compromise emerged. The new text banned passive rewards but allowed activity-based incentives – rewards tied to using the stablecoin for transactions, staking, or other engagement. Armstrong publicly endorsed this version on May 1, 2026, posting “Mark it up” as a signal that Coinbase was ready for the bill to advance to committee.
Coinbase’s January withdrawal was a high-risk move. It stalled the bill and gave opponents time to mobilise. It also forced a renegotiation that produced the activity-based compromise.
Armstrong’s public endorsement on May 1 signalled that Coinbase was back in. The Senate markup was targeted for the weeks following late May discussions. That timeline is now the key catalyst.
JPMorgan (JPM) continues to oppose the Clarity Act in its current form. Dimon’s position is consistent: stablecoin issuers that offer yield should face the same capital, liquidity, and disclosure requirements as banks.
The bank’s Alpha Score is 49/100 (Mixed), with a current price of $299.02, up 0.77% on the day. That neutral score reflects the uncertainty around regulatory outcomes that could affect JPMorgan’s competitive position.
President Trump added a new variable by publicly criticising banks for holding the Clarity Act “hostage.” That statement suggests the political winds may be blowing in Armstrong’s direction despite Dimon’s objections.
Trump’s support is a double-edged sword. It could pressure Senate Republicans to move the bill forward. It could also harden Democratic opposition if the bill is seen as a crypto-friendly giveaway.
The Clarity Act is a binary event for Coinbase and JPMorgan. If the bill passes with activity-based incentives, Coinbase gains a regulatory moat around its stablecoin yield product. If it stalls or fails, the regulatory uncertainty persists and the SEC may impose stricter rules.
The Dimon-Armstrong feud is the visible symptom of a deeper structural conflict. Banks want to preserve their deposit franchise. Crypto exchanges want to offer yield without becoming banks. The Clarity Act is the legislative test of which side wins.
The compromise text has Armstrong’s support and Trump’s implicit backing. The Senate markup in the coming weeks will determine whether that is enough to overcome bank opposition.
Related reading: Dimon-Armstrong Feud Reshapes Clarity Act Stablecoin Rules
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.