The U.S. government’s much-anticipated CLARITY Act may not move forward as quickly as expected. What was supposed to be an April review could now slip into May, as tensions rise between traditional banks and crypto supporters over stablecoin rules.
At the center of the debate is whether stablecoins should be allowed to offer yield (interest-like rewards). Banks are pushing back hard, warning that such features could pull massive amounts of money out of the traditional banking system.
The Senate Banking Committee is currently under pressure to decide whether the bill will be reviewed during the week of April 27. However, scheduling conflicts—including the confirmation hearing for Federal Reserve chair nominee Kevin Warsh—are complicating things.
Meanwhile, lobbying efforts are intensifying. Groups like the North Carolina Bankers Association are urging members to contact Senator Thom Tillis and push for changes to the bill. Their concern focuses mainly on provisions that would allow yield-bearing stablecoins, which they believe could disrupt the current financial system.
Major banking organizations, including the American Bankers Association, have raised alarms that stablecoins offering rewards could lead to as much as $6.6 trillion being withdrawn from bank deposits. From their perspective, this could significantly weaken traditional lending systems.
But the White House sees things differently. A recent report from the Council of Economic Advisers suggests that banning stablecoin yields would have only a minimal impact on bank lending—just $2.1 billion, or around 0.02% of the total $12 trillion loan market. The same report also estimates that such a ban could cost consumers about $800 million in lost benefits.
This contrast has added fuel to the debate. The report argues that limiting stablecoin rewards would do little to protect banks while reducing financial benefits for users.
White House crypto adviser Patrick Witt has openly criticized the banking industry’s stance, saying their opposition is driven by “greed or ignorance.” He has urged lawmakers not to let these concerns delay the bill unnecessarily.
Senator Tillis, who plays a key role in shaping the legislation, has suggested hosting an in-person session with industry participants—informally dubbed a “crypto carnival.” While this could help resolve disagreements, it may also push the timeline further.
Even beyond the stablecoin issue, the CLARITY Act still faces several hurdles. Lawmakers must work through complex topics such as DeFi regulation, conflict-of-interest rules, and ethical guidelines for trading digital assets.
And even if the bill clears the Senate Banking Committee in the coming weeks, it will still need to be aligned with a House version before it can reach President Donald Trump for final approval.
The ongoing battle over stablecoin yields reflects a bigger question: who will control the future of digital finance? With trillions of dollars potentially moving into blockchain-based systems, banks, crypto companies, and DeFi platforms are all competing for a share of that rapidly evolving space.
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CLARITY Act Faces Delay as Banks Push Back on Stablecoins