Clarity Act faces hurdles from US banks

TLDR

The Clarity Act is indeed running into resistance from US banks, mainly over whether stablecoins can pay yield to customers.

1. Banks are lobbying hard against stablecoin yield provisions, warning of large deposit outflows and lending risks.
2. This fight has stalled a bill that would finally define crypto market structure, keeping US regulation and institutional adoption in limbo.
3. The next key tests are Senate Banking Committee negotiations on yield language and whether banks accept a compromise this spring.

Deep Dive

1. How Banks Are Pushing Back

The main friction point is stablecoin rewards. Banks argue that if tokens can pay interest-like yields, deposits will leave traditional accounts and shrink their lending base.

Trade groups such as the Independent Community Bankers of America have warned that yield-bearing stablecoins could drive up to $1.3 trillion of deposits out of banks and cut lending by $850 billion, and they want the Clarity Act to close this channel entirely for third-party platforms like Coinbase that pass through stablecoin yield.

By contrast, a White House Council of Economic Advisers report finds that banning stablecoin yields would only boost bank lending by about $2.1 billion, or 0.02% of total loans, while costing consumers roughly $800 million per year in lost returns, calling the banking lobbys extreme scenarios implausible.

2. Why It Stalls Crypto Market Structure

The Digital Asset Market Clarity Act would split responsibilities between the SEC and CFTC, define when a token is a security, and set rules for exchanges, brokers, and custodians, which is crucial for large US institutions to scale crypto activity.

Despite that, resistance over stablecoin yield has dragged the bill in the Senate. Wintermutes policy lead estimates the odds of passage this year at about 30%, citing banks refusal to compromise on yield-bearing products as the major sticking point, even after proposals from the White House and crypto firms.

For crypto users and builders, that means continued uncertainty on core questions like which regulator applies, how centralized platforms can offer rewards, and how easily US pension funds, insurers, and banks can participate onshore.

3. What To Watch Next

Treasury Secretary Scott Bessent and senior regulators at the SEC and CFTC have publicly urged Congress to pass the Clarity Act, warning that Senate floor time is scarce and that delays risk pushing innovation to jurisdictions with clearer rules such as Singapore and Abu Dhabi.

Senate Banking Committee leaders are working toward a markup, with several reports pointing to late April as the window for a committee vote, and prediction markets putting passage odds for a 2026 law in the mid to high double digits. The unresolved piece is the exact language on stablecoin rewards: caps, eligibility limits, or extra safeguards that banks can live with.

If banks accept a narrow compromise that allows some stablecoin yield under tighter rules, the path to passage improves. If they hold the line, the bill could slip past midterms and leave US crypto markets in partial limbo for years.

Conclusion

US banks are not trying to kill crypto outright as much as they are trying to contain competition from yield-bearing stablecoins, and that fight is what is slowing the Clarity Act. For crypto, the stakes are high: either a near-term, rules-based US framework that unlocks broader institutional participation, or another multi-year stretch of fragmented oversight while activity migrates toward more predictable jurisdictions.