In the tug-of-war in the U.S. Congress surrounding the Clarity Act, AmericasCUs, representing the American credit union industry, has collectively "taken a stand" with credit union associations from all 50 states for the first time. According to a joint statement relayed by a single source, these institutions publicly support the bill's core structure to build a clear regulatory framework for digital assets such as specific types of cryptocurrency payment tools, but they explicitly demand tighter arrangements regarding the income of crypto assets: they are concerned that the current compromise text promoted by Tillis-Alsobrooks allows the so-called "functionally passive" reward structure to continue, which is equivalent to providing yield-like products without adhering to traditional deposit regulatory requirements. This statement directly affects whether local credit unions can engage in cryptocurrency yield businesses under compliance and echoes the previous anxiety from the banking sector that the same clause may erode deposit and interest rate businesses, resulting in a rare consensus among traditional financial institutions regarding regulatory demands on the "who regulates and how" of crypto yield issues. For issuers of crypto assets, if the yield clauses are ultimately strengthened in line with those of credit unions and banks, product models that rely on passive reward structures to attract funds will face the risk of compliance restructuring or being forced out of mainstream financial channels, and the struggle over the ownership and regulatory boundaries of crypto yields will escalate from technical details into a systematic game of re-dividing profit pools and responsibility chains among all parties.
Clarity Act yield clauses become a new battlefield for traditional finance
On the regulatory map for cryptocurrencies in the U.S., the Clarity Act has been positioned as a "infrastructure bill"—research briefs indicate that its goal is not piecemeal fixes but to construct a systematic legal and regulatory framework for digital assets aimed at payment and settlement. What truly makes traditional finance on edge is not the asset definition itself, but the design concerning income arrangements: once deemed a "yield tool" akin to deposits, it touches the core business boundaries of banks and credit unions. The banking sector has previously publicly warned that the income arrangements related to the Clarity Act may alter the competitive landscape of deposit businesses, and now with the credit union camp joining in, this clause has escalated from a technical issue to a systemic fight over who manages interest rate differentials and customer relationships.
The version currently referred to as the Tillis-Alsobrooks compromise is facing concentrated criticism on this contentious point. According to the briefing relayed by Odaily Planet Daily, the compromise on yield clauses has been criticized for still potentially allowing "functionally passive" reward structures to exist—meaning users do not have to actively bear additional risks or operations to receive ongoing rewards simply by holding a certain type of cryptocurrency asset. When AmericasCUs expressed their stance alongside the credit union alliance from all 50 states, they clearly articulated their concerns regarding this point: they support the vast majority of the Clarity Act but demand a notable tightening of the yield clauses to prevent passive rewards from becoming a new channel to circumvent deposit regulation. Echoing the previous position of the banking sector, this means that the two major camps of traditional finance have formed a united front on the issue of cryptocurrency yields, placing the yield clauses of the Clarity Act at the center of legislative negotiations, turning them into a critical battleground determining which crypto products can enter mainstream financial channels and what interest rates and regulatory red lines they must adhere to.
The fears of credit unions: deposits siphoned away by on-chain interest
In the narrative from AmericasCUs and the 50-state credit union alliance, the "functionally passive" reward structure is not a technical detail but a conduit that will quietly rewrite the flow of deposits. The so-called "functionally passive" means members do not need to click "invest," nor do they need to acknowledge that they are bearing market risks; as long as they leave their funds in an account or wallet linked to a digital asset, the system automatically issues yields based on the balance, appearing nearly indistinguishable from traditional deposit interest. Local credit unions worry that if the Clarity Act accepts this design without considering it as a business requiring complete deposit regulation, community residents may migrate their funds to higher-yielding on-chain or crypto products under the same “do nothing” experience, with the low-cost funds that originally belonged to local lending and micro-services being gradually siphoned away by legally recognized “passive income.”
Rodney Hood recently emphasized the important role of credit unions in the modernization of the financial system, providing political and discourse space for these institutions to participate in discussions about digital asset rules. However, it also highlights their dilemma: they do not want to be left behind in the era, hoping to connect community members safely to new digital financial channels, yet must guard against modernization turning into a "diversion project" under loose yield clauses. For institutions that rely on local deposits and community finance, if the Clarity Act leaves too much flexibility in the yield part, allowing products that "look like deposits but are actually high-yield on-chain accounts" to legally exist, then modernization would mean member funds quietly diverting from the service points they rely on to interfaces controlled by code and contracts, forcing credit unions to learn to adapt in the reality of shrinking balance sheets due to the financial redistribution brought on by regulatory definitions.
Banks and credit unions stand on the same side in crypto yield regulation
In the discussion of the Clarity Act, the banking industry was actually the first to raise questions about the yield arrangements related to asset-backed tokens. They are cautious because the bill, if it does not clearly define the structural requirements for such yield products, may allow them to closely resemble traditional accounts in form while completely drifting beyond existing deposit regulations in terms of yield and risk, which would naturally lead capital to chase higher returns, moving deposits that should remain at local branches to high-yield accounts driven by code. The concerns publicly expressed by the banking sector directly point to the possibility that this clause could erode traditional deposit and yield businesses, urging legislators not to leave too much flexibility for crypto yield products that essentially replace deposits under the guise of "not looking like deposits."
Recently, the joint statement by AmericasCUs along with the credit union alliance from all 50 states has been seen by many observers as filling in another piece of traditional finance's landscape on this issue. The statement supports the vast majority of the Clarity Act, acknowledging the necessity of a regulatory framework for cryptocurrencies for the modernization of the financial system, while explicitly demanding a strengthening of the yield clauses, explicitly opposing the current Tillis-Alsobrooks compromise plan that allows "functionally passive" reward structures. With shared interests in the outflow of deposits from the local financial system to high-yield crypto products, banks and credit unions have thus formed a visible consensus on the issue of crypto yield regulation: any yield arrangements associated with such tokens should not be glossed over in regulatory definitions. From the issuers’ perspective, they face pressure from a relatively united alliance of traditional deposit institutions; if the future yield structures continue to attempt to navigate the fuzzy ground between "accounts" and "investments," it will be increasingly difficult to find a safe landing in the final text from Congress; under this convergent pressure, the specific wording concerning crypto yields in the Clarity Act will directly test Congress's ability to delineate lines between traditional financial defenses and innovation spaces.
Red lines for yield design that crypto issuers and platforms may face
Following the demands of AmericasCUs, if the Clarity Act ultimately adopts stricter limitations on "functionally passive" reward structures in its yield clauses, the first to be constrained will be various yield designs that appear to be like account interest yet are packaged as "technical incentives." Once the accounting tokens pegged to fiat currencies and their derivative products are required to clearly differentiate between "deposit-like yields" and "investment returns" in legal texts, issuers will find it hard to simulate traditional account interest while evading deposit regulations with automated balance rewards and platform-wide interest rates. This means that design teams must make clear structural splits: one side being pure payment and accounting functions, and the other needing to involve active selections along with risk disclosures, otherwise any automatic rewards deemed "functionally passive" could be seen as crossing the line.
For issuers, trading platforms, and compliance agencies planning to launch yield-bearing crypto products, if such red lines are written into the bill, they will directly become issues of cost and architecture. Issuers may need to establish legal entities separately for the yield modules, reassess whether they touch the edges of deposit and investment product licenses, and compliance teams will have to prepare multiple structural versions in advance during the stages before the terms are finalized to cope with various outcomes of different wordings. Platforms will also be forced to enhance the granularity of yield presentations, breaking down past statements like “annual yield” into dimensions such as sources, risks, and whether they depend on the platform's own distribution, allowing regulators and users to see if there is a logic of "passive accounts" behind the yield. For ordinary users, this superficially increases transparency about yields and clarifies product tiers: low-risk, regulations-compliant accounting token products and high-yield combined products clearly marked as investments will be separated; however, at the same time, the potential for cross-border arbitrage may be compressed, leading high-yield structures to be more easily labeled as "investments" or even "securities," being compelled to shift toward jurisdictions with looser rules, while users willing to remain under the U.S. framework will need to reassess the exchange between yield and compliance protection under clearer compliance premises.
The legislative game is not over: yield clauses will rewrite the relationship between crypto and local finance
The struggle over the yield clauses of the Clarity Act is, in fact, a deep game between traditional finance and the crypto industry regarding "who absorbs user funds and who bears regulatory responsibilities": on one side is the local financial institutions represented by AmericasCUs and the 50-state credit union alliance, who, while supporting the vast majority of the bill's content, clearly demand tighter yield arrangements; on the other side is the crypto business model aiming to layer passive reward structures onto accounting tokens. The banking sector had previously expressed concerns about relevant yield clauses, and now credit unions echo banks on the same clauses, effectively forming a united front for traditional finance to pressurize, attempting to close the "functionally passive" reward space in the Tillis-Alsobrooks compromise more tightly. This cooperation is highly likely to rewrite the final legislative text in subsequent negotiations, thus pushing crypto yield products more clearly into a compliance framework defined as "investment" rather than "deposit-like." However, it must be acknowledged that the current Clarity Act is still merely a proposed bill in Congress; the research is based only on a single report from Odaily Planet Daily relaying a crypto journalist from Fox Business on the X platform, lacking original clause texts or any publicly available legislative progress nodes. Under such information conditions, all judgments about its industry impact can only remain highly cautious, viewing this struggle over yield clauses as a variable still in fermentation; continuous observation of subsequent versions of amendments and statements from regulatory agencies is necessary to truly see where the boundaries for crypto yield products and the U.S. local financial system will be drawn in the future.
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