Bank lobbying stalls US stablecoin yield bill

TLDR

Bank lobbying has helped stall a key US crypto market-structure bill over whether stablecoin products can pay yield.

1. A broad CLARITY Act crypto bill is stuck in the Senate after bank groups rejected a White House compromise on yield-bearing stablecoins.
2. Banks argue stablecoin yields could siphon hundreds of billions of deposits from traditional accounts, while crypto firms say a ban is anti-competitive.
3. The outcome will shape whether US users get regulated stablecoin rewards at home or are pushed toward offshore or DeFi platforms instead.

Deep Dive

1. How The Bill Stalled

The Digital Asset Market Structure Clarity Act (often shortened to the CLARITY Act) passed the House in 2025 but has hit an impasse in the Senate.

A planned Senate Banking Committee markup in mid-January was postponed indefinitely amid disputes over stablecoin yield, and the committee has not yet rescheduled it, leaving the bill in limbo. Reporting notes that banking groups rejected a White House proposal that would have allowed limited stablecoin rewards only for certain payment activity, not on idle balances, contributing directly to the stalemate.

Outlets like Cointelegraph and Bitcoin-focused media describe the situation as crypto legislation that is "stalled" after major banks refused the compromise on yield language in the bill, increasing doubts about passage this year as the election calendar tightens.

2. Why Banks Fight Stablecoin Yield

Banking associations warn that allowing stablecoin issuers or crypto platforms to pay yield on dollar-pegged tokens could create "unregulated deposits" that pull funding out of banks and weaken lending. Some analyses cited by policymakers suggest potential deposit flight on the order of hundreds of billions of dollars over the next few years if high-yield stablecoins scale.

By contrast, many US banks currently pay around 0.01% to 0.05% on basic savings, while stablecoin and crypto savings products can advertise 4% to 5% or more. Crypto firms argue that banning rewards simply protects this spread, calling it anti-competitive and harmful to consumer choice.

Existing law already reflects this tension: the GENIUS Act framework legalized fully-backed dollar stablecoins but banned issuers themselves from paying interest, instead pushing yields to exchanges, fintech apps, and DeFi. The current bank push is to go further and restrict those third-party rewards as well.

3. Implications And What To Watch

For stablecoin users, the stalled bill means continued uncertainty around US-regulated yield products. Rewards that exist today may remain in a gray zone, with regulators interpreting GENIUS and any eventual CLARITY language.

For issuers and platforms (think major exchanges and fintechs), the details matter: a narrow compromise could allow modest, payment-linked incentives, while a bank-favored outcome could sharply limit or effectively ban yield programs on US-regulated stablecoins. That would push more aggressive yield products toward offshore venues or DeFi protocols with higher regulatory risk.

Key signals to watch include any new Senate Banking Committee markup date, revised compromise language on when rewards are allowed, and whether lawmakers tie meaningful yields to bank-like licensing requirements.

Conclusion

Bank lobbying has turned stablecoin yield into the sticking point for the United States main crypto market-structure bill, freezing progress on broader clarity. How lawmakers ultimately balance deposit stability against competition will determine whether US-regulated stablecoin platforms can compete on rewards, or whether the best-yielding products continue to sit offshore and on-chain, with all the added risk that implies.