Clarity Act stalls amid US banking pushback

TLDR

The CLARITY Act, a flagship US crypto market structure bill, is bogged down in the Senate as banking industry resistance to stablecoin yields blocks progress.

1. The bill has already passed the House but remains stalled in the Senate Banking Committee with limited calendar time left to move it forward.
2. US banks warn that yield-bearing stablecoins could drain deposits, but White House economists find the lending benefit of a yield ban is tiny compared to consumer costs.
3. For crypto users, the delay keeps US regulatory uncertainty high, with the next few Senate Banking milestones likely deciding whether comprehensive rules arrive before midterms.

Deep Dive

1. What The Act Is And Where It Stands

The Digital Asset Market Clarity Act (often shortened to CLARITY Act) would define when tokens are securities or commodities, split authority between the SEC and CFTC, and set core rules on custody, disclosures, and stablecoins.

It passed the House in July 2025 with bipartisan support but has since remains stalled in the Senate Banking Committee, where markup has been repeatedly pushed back.

Policy analysts quoted in recent coverage put near term passage odds at roughly one in three, while prediction markets are somewhat more optimistic, but all agree the window before the 2026 midterms is tight.

2. Why Banks Are Pushing Back On Stablecoin Yield

The core fight is over whether stablecoin holders can earn yield, especially via exchanges and platforms such as Coinbase. Banks argue that attractive stablecoin yields could pull deposits out of the traditional system, harming lending and community banks.

A White House Council of Economic Advisers study, however, finds that banning stablecoin yield would increase bank lending by only about $2.1 billion, roughly 0.02 percent of the US loan market, while costing users around $800 million a year in lost welfare, implying costs far outweigh benefits. This finding, summarized in a recent CEA analysis, directly challenges banking lobby warnings.

Despite that, large banking groups continue to push for stricter yield prohibitions, and their opposition has so far been enough to prevent a Senate deal.

3. Implications For Crypto And What To Watch

Without the CLARITY Act, US crypto remains governed by fragmented agency guidance and enforcement, which discourages some institutional capital and pushes activity to clearer jurisdictions like Singapore and Abu Dhabi, as Treasury officials have repeatedly warned in public appeals for passage.

If the Act eventually passes, it would likely lock in CFTC-style rules for many tokens, provide a durable path for stablecoins within banking and payments, and give large funds and banks more legal comfort to scale US-facing crypto products.

In the near term, key signals are whether Senate Banking actually holds a markup on the latest compromise text, whether bank groups soften their stance on limited stablecoin rewards, and whether Senate leaders allocate floor time before election season.

Conclusion

The CLARITY Act is designed to give US crypto markets long-sought regulatory certainty, but aggressive banking pushback around stablecoin yields has kept it stuck in the Senate. Unless lawmakers can reconcile minimal measured banking risks with political pressure from banks, the United States risks extending its current patchwork regime while other jurisdictions continue to attract crypto innovation.