TLDR
Major U.S. banks have rejected a White House compromise on the CLARITY Act crypto bill, putting landmark U.S. digital asset legislation back into deadlock.
- The CLARITY Act talks stalled after banks refused a White House deal that would have allowed limited stablecoin rewards while banning yield on idle balances.
- Banks warn yield-bearing stablecoins could pull up to hundreds of billions of dollars from bank deposits, while crypto firms say blocking rewards is anticompetitive.
- With Senate time tight and politics polarized, chances of passing the CLARITY Act this year look weaker, keeping U.S. crypto rules uncertain and pushing activity offshore.
Deep Dive
1. What Banks Rejected
The CLARITY Act is a broad U.S. crypto market structure bill that, among other things, defines how stablecoin yields can work alongside last years GENIUS Act.
According to reporting, the White House brokered a compromise that would allow stablecoin reward programs in narrow cases, such as peer-to-peer payments, but not for simply holding idle balances. Crypto firms like Coinbase accepted this, but banks did not, and talks have now stalled after they rejected the proposal, casting doubt on passage this year.
President Donald Trump publicly attacked banks for undermining his crypto agenda after the compromise was rejected, urging Congress to move quickly on the bill.
The sticking point is no longer whether to regulate crypto, but how generous stablecoin reward rules can be without reshaping the banking system.
2. Why Yields Scare Banks
Banks argue that if stablecoins can pay attractive yields, they could siphon a large share of traditional deposits into crypto platforms, shrinking cheap funding for loans. One analysis cited by lawmakers estimates stablecoins could divert around 500 billion dollars of deposits from U.S. banks by 2028 if rewards are widely allowed.
Crypto companies counter that banning yields is anticompetitive, since consumers already earn 4 to 5 percent on some stablecoin products while many savings accounts still pay near zero, and they say clear rules would make those yields safer, not riskier.
The fight is less about on-chain tech and more about who captures the interest spread on U.S. dollars - banks or crypto platforms.
3. What To Watch Next
The bill now faces several headwinds: entrenched banking opposition, disagreements over ethics and anti-money-laundering provisions, and limited Senate floor time before election campaigning. Analysts note that if this window is missed, odds of passage drop further, especially if the chamber composition shifts.
In parallel, the GENIUS Acts stricter stablecoin rules already exist, so each month of delay on CLARITY keeps U.S. crypto firms operating in a partial, ambiguous regime and incentivizes growth in more permissive jurisdictions.
For crypto users and builders, expect ongoing uncertainty around U.S. stablecoin yields and exchange rules, with clearer frameworks likely arriving later and potentially from other regions first.
Conclusion
Banks rejecting the White House compromise has turned the CLARITY Act from a near-term path to U.S. crypto clarity into another stalled market-structure effort. The core clash is over stablecoin yields and deposit flight, and until that is resolved, U.S. platforms will continue to face regulatory ambiguity while offshore venues and friendlier jurisdictions pick up momentum.
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