Banks and cryptocurrency companies appear inexorably at odds over how stablecoin yields will be treated both in legislation and regulation.

A bipartisan pair of senators – Thom Tillis, R-NC, and Angela Alsobrooks, D-MD – floated language in the Clarity Act, first reported Friday, that would bar crypto firms from issuing rewards for stablecoin balances that are “economically or functionally equivalent” to interest-bearing bank deposits. 

Bank trade groups, however, argue the compromise would allow rewards for users who participate in a membership program – potentially letting platforms bypass the yield ban for passive stablecoin holders.

“Senators Tillis and Alsobrooks are…