US Senate Bill Threatens Passive Stablecoin Yield in Crypto Market

VADODARA, January 13, 2026 — A U.S. Senate Banking Committee draft bill proposes restricting interest payments on passively held stablecoins, potentially disrupting billions in decentralized finance (DeFi) yield strategies. According to Eleanor Terrett's reporting, the CLARITY Act would only permit rewards when linked to substantive activities like trading or liquidity provision. This latest crypto news arrives as Bitcoin hovers near $91,944 amid persistent market fear.

Market Context & Background

Market structure suggests this regulatory move targets the core economic incentive of stablecoin adoption. Since 2021, passive yield strategies have driven approximately $40 billion in stablecoin deposits across DeFi protocols. The proposed restriction mirrors traditional banking regulations under the Federal Reserve's Regulation D, which historically limited savings account transactions. Historical cycles indicate regulatory pressure typically follows periods of rapid capital inflow into crypto-native yield products. This development follows other recent regulatory shifts, including the detailed market structure analysis of the CLARITY Act text and earlier leaked drafts that excluded this provision.

What Happened?

According to Eleanor Terrett's reporting on Crypto in America, the draft CLARITY Act contains a provision restricting interest on stablecoins to "substantive activities." These include opening accounts, trading, staking, or providing liquidity. Senators have a 48-hour amendment window before the January 15 deadline. The provision's final inclusion remains uncertain. This regulatory development occurs against a backdrop of increasing scrutiny documented in official SEC.gov filings regarding crypto asset classification.

Technical Analysis & Price Action

Bitcoin's current price of $91,944 represents a -0.17% 24-hour change. Market structure shows consolidation below the psychological $92,000 resistance. The 50-day moving average at $89,500 provides immediate support. RSI readings at 42 indicate neutral momentum with bearish bias. Volume profile analysis reveals thin liquidity between $90,000 and $92,000, creating a potential Fair Value Gap (FVG). Bullish invalidation level: $89,500 (break below 50-day MA). Bearish invalidation level: $93,200 (clearance of recent swing high).

By The Numbers

Why It Matters

Institutional impact: Large-scale stablecoin holders may reallocate capital to Treasury bills or money market funds. This could trigger a liquidity grab from DeFi protocols. Retail impact: Passive yield strategies become less accessible. Market structure suggests potential migration to jurisdictions with favorable regulations. The proposal challenges the fundamental value proposition of programmable money on blockchain networks.

Community Sentiment

Market analysts express concern about regulatory overreach. "This threatens the composability of DeFi," noted one protocol developer on X. Others highlight potential positive effects: "Forcing active participation could strengthen network security." Sentiment remains divided along institutional versus retail lines.

Price Prediction / Future Outlook

Bullish case: Regulatory clarity emerges with favorable amendments. Capital flows into active participation protocols. Bitcoin reclaims $95,000 as uncertainty dissipates. Bearish case: Restrictive provisions pass unchanged. Stablecoin outflows accelerate. Bitcoin tests $85,000 support amid broader risk-off sentiment. Market structure suggests increased correlation with traditional finance instruments under either scenario.