Banking industry groups have escalated their opposition to the Clarity Act's stablecoin provisions, with the American Bankers Association mounting an aggressive lobbying push ahead of Thursday's Senate Banking Committee markup. According to American Bankers Association, the group is petitioning banks and their employees to contact senators immediately to push for tighter restrictions on payment stablecoins in the crypto market structure bill. The ABA warns that the latest version of the legislation still leaves room for crypto firms to offer interest-like rewards that may encourage consumers to move money out of traditional bank accounts. This latest development comes after Senators Thom Tillis and Angela Alsobrooks released a compromise text addressing yield, which would prohibit crypto companies from offering yield on static stablecoin reserve holdings but allowing rewards for stablecoins involved in activities. The banking groups argue that yield-bearing stablecoins could function as substitutes for insured deposits, draining funding that banks rely on to make mortgages, business loans and other forms of credit.
Senator Bernie Moreno on Monday accused the U.S. banking lobby of full panic mode over CLARITY Act stablecoin yields, escalating tensions ahead of Thursday's Senate markup. The Ohio Republican, who sits on the Senate Banking Committee, published the criticism on X ahead of the critical vote. ABA CEO Rob Nichols sent a Sunday letter to every bank CEO in the country, calling for "immediate engagement" on stablecoin yield policy. Nichols warned that the current proposal would prompt deposit flight into payment stablecoins, citing risks to growth and stability. His letter described what banks call a stablecoin loophole in the committee's draft, with an excerpt reading "we believe committee members may not be fully aware of the risks to the economy by the stablecoin loophole." Moreno rejected that framing, saying the question was already litigated during the GENIUS Act debate led by Senator Bill Hagerty. A successful markup would advance the bill toward a full Senate floor vote, while a stall could sideline U.S. crypto legislation for the rest of the session.
White House Executive Director of the President's Council on Digital Assets Patrick Witt told the audience at Consensus Miami this week that he believed it was possible to have President Donald Trump sign the Clarity Act into law by July 4. The timeline would require a markup this month (which seems very possible), four weeks for the Senate to merge the Banking and Agriculture bills (technically possible), a few weeks for reconciliation with the House (also technically possible) and the House vote (will depend on the House) and finally, the part where the president signs the bill. Witt's comments add significant momentum to the legislative push, with the White House now actively supporting the timeline rather than just remaining neutral on the bill's prospects. Witt called out the bank lobby, saying the ABA refused White House meetings on the yield issue back in February. "I specifically requested the attendance of Mr. Nichols and other bank trade CEOs at the meetings we hosted back in February to resolve the stablecoin rewards/yield issue. They refused. I guess the White House was beneath them? In their defense, I wouldn't want to have to defend their position in public either," he said.
The Senate Banking Committee is expected to release updated legislative text as soon as Monday, with comments and amendments from lawmakers likely to emerge Tuesday before Thursday's committee vote on the Clarity Act. According to American Bankers Association, the group is circulating a call-to-arms to bank executives nationwide, warning that stablecoin provisions in the updated bill could still undermine bank deposits and weaken financial stability. The committee's markup represents a pivotal moment for the crypto market structure legislation that stalled in the Senate after clearing the House in July. Polymarket traders have dramatically increased the CLARITY Act's odds to 73% for being signed into law in 2026, representing a significant jump from just 46% at the start of May. The markup comes as about 10 weeks of Senate floor time remain before the midterm elections, with lawmakers and industry participants warning that the longer negotiations drag on, the harder it may become to move comprehensive crypto legislation through the Senate.
The American Bankers Association argues that permitting yield-bearing stablecoins could rapidly scale the market from roughly $300 billion today to as much as $2 trillion, increasing pressure on bank funding. According to American Bankers Association, the banking group argued that the administration focused on the wrong policy question by analyzing the effects of banning stablecoin yield rather than the consequences of allowing it. The dispute has become one of the defining battles in Washington's crypto policy debate, with bank executives and trade groups arguing that yield-bearing stablecoins could function as substitutes for insured deposits, while supporters of stablecoins argue the products offer consumers faster payments and new ways to move money online. Senators Thom Tillis and Angela Alsobrooks brokered the disputed compromise text, which bars yield "economically or functionally equivalent" to deposit interest but still permits rewards from bona fide platform activity. The clash over stablecoin yield, which has already complicated work on the Senate's GENIUS Act, threatens to slow broader crypto legislation as the Banking Committee prepares to mark up the Clarity Act this week.
A HarrisX national survey from May 1-4 found 52% of respondents support the CLARITY Act, with just 11% opposed, demonstrating significant public backing for the legislation. The poll revealed that nearly half of US voters are willing to cross party lines to get clear crypto regulation off the ground, with 47% saying they would consider voting for a candidate outside their preferred party if that candidate backed the bill and their own party did not. Among crypto users, that number jumped to 70%. As reported by VT Markets, the May 2 compromise produced immediate market reactions, with Bitcoin briefly crossing $80,000 and Coinbase shares climbing 6.1% to $202.99, while Circle shares jumped 19.9% to $119.53. The HarrisX poll also highlighted strong bipartisan support, with 55% of Democrats, 58% of Republicans and 42% of independents supporting it. Galaxy Research previously put the CLARITY Act's 2026 passage odds at about 50-50 or lower, citing the bill must clear several steps including Banking Committee markup, a 60-vote Senate floor threshold, and reconciliation with other versions.
