DBS strategists call the CLARITY Act a 'constructive compromise' that pulls stablecoins from trading tools into financial plumbing. The bill's yield ban protects banks while allowing usage rewards.
The U.S. Senate Banking Committee advanced the CLARITY Act (Digital Asset Market Clarity Act) on a 15–9 vote last week. Markets treated it as another regulatory step. DBS, Singapore's largest bank, sees something different: a structural turning point that pushes stablecoins from speculative trading tools into core financial infrastructure.
In a May 14 edition of its Crypto Digest, DBS strategists Chang Wei Liang and Chee Zheng Feng called the bill a "constructive compromise" that balances banking stability with digital-asset innovation. The committee vote sent the bill to the full Senate roughly 10 months after the House passed it 294–134 in July 2025. The next hurdle requires 60 votes to overcome a filibuster. With 53 Republicans in the chamber, supporters need at least seven Democratic votes if party lines hold.
The bill's flashpoint is stablecoin yield. It would prohibit interest-like returns for passively holding a stablecoin – treating that behavior as deposit-like – while permitting rewards tied to real usage such as transactions, payments, and certain staking or platform activity. The compromise language, negotiated over four months by Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, survived intense bank lobbying. The American Bankers Association sent more than 8,000 letters opposing the approach. The framework held.
DBS explained the logic: U.S. banks fund roughly 80% of lending from customer deposits. By banning passive yield, policymakers protect banks' funding base from deposit flight into stablecoins. At the same time, usage-based rewards nudge stablecoins from "buy-and-hold" toward "buy-and-use," reinforcing their potential as a settlement rail embedded in everyday financial flows.
Practical rule: The yield ban is the single most consequential market-structure pivot in the bill. It determines which business models survive and which fail.
The shift changes the earnings pool. Instead of minting tokens for passive holders, issuers and infrastructure providers will earn from payment fees, custody, settlement, and compliance services. DBS argued that stablecoins could be treated less like static cash equivalents and more like assets with "productive" use cases. That opens revenue opportunities across issuance, custody, and payment and clearing infrastructure.
DBS tied the policy moment to renewed strength in major cryptoassets. From late March through early May, Bitcoin (BTC) rose about 18% and Ethereum (ETH) about 8%, broadly comparable to U.S. equity gains. Gold traded flat.
Flows supported the price action:
DBS noted the ETH purchases represented about 0.4% of Ethereum's market capitalization as of late March, similar in magnitude to Bitcoin's ~$6 billion buying pressure at about 0.45% of its market cap. As of May 12, DBS cited BTC at $80,526 and ETH at $2,278.
The buying is not random. Strategy (ticker MSTR on the Nasdaq) now holds over $4 billion more BTC, reinforcing its role as the largest corporate holder. Coinbase (ticker COIN) acts as the primary custody and trading partner for many institutional flows. AlphaScala's proprietary Alpha Score assigns both stocks weak ratings right now: COIN at 32/100 and MSTR at 34/100. Even with a structural regulatory uplift, execution and valuation risk remain – a reminder that regulatory clarity does not guarantee share price performance.
DBS's central argument is that investors are misreading the signal. The key development is not just that U.S. regulation is advancing. Stablecoins are being pulled into the core logic of the financial system. Banks are increasingly treating stablecoins not as an external crypto experiment but as part of the future "monetary stack" – a base layer for payments, settlement, and programmable finance.
This has direct implications for tokenization, particularly real-world assets (RWA). Programmable assets require programmable liquidity. Stablecoins are rapidly becoming the settlement layer connecting traditional finance with onchain markets. If the RWA market is to scale, DBS argues, the payment and settlement infrastructure must be legally grounded first – and the CLARITY compromise begins to outline that foundation.
Winners:
Losers:
Final passage is not guaranteed. The Senate needs 60 votes to break a filibuster. Implementation may not arrive until 2027 at the earliest, DBS cautioned. Even if the bill stalls, its framework is already influencing global debate.
DBS highlighted Korea as a potential adopter of the "ban passive yield, allow usage incentives" model. A won-pegged stablecoin under that design would address commercial banks' concerns about demand-deposit outflows while letting fintechs build user engagement through payments. Well-capitalized internet banks and large fintech platforms could find new lines in issuance, custody, and payment infrastructure.
DBS's message is blunt: the stablecoin story is shifting from speculative tokens to financial plumbing. Underestimating that integration could mean missing the next phase of crypto's institutionalization. The CLARITY Act's yield ban is the first concrete legislative test of that shift. For traders and allocators, the question is not whether stablecoins will be regulated – it is whether the winners will be the same incumbents that already dominate fiat onramps and settlement rails.
For more context on the Senate committee vote, read "CLARITY Act Advances: Senate Panel Moves Crypto Bill Forward". Track broader trends in our crypto market analysis and individual profiles for Bitcoin (BTC) and Ethereum (ETH).
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.