President Donald Trump has strengthened support for a new UK-US stablecoin framework as the Senate races to advance the CLARITY Act despite growing opposition from banking groups over its stablecoin provisions. According to a joint statement released through the Transatlantic Taskforce for Markets of the Future, the United Kingdom and the United States have agreed that properly regulated stablecoins can improve cross-border payments, financial market infrastructure, and competition while providing businesses with more consistent regulatory treatment across both jurisdictions. The Transatlantic Taskforce for Markets of the Future, created in September 2025, considers stablecoins 'an important vehicle for innovation in digital money' and intends to support their use in cross-border payments, settlement, and capital market transactions while coordinating domestic regulatory frameworks to reduce unnecessary differences between the two markets.
The Senate is preparing to release the CLARITY Act's legislative text within the next few days, as reported by Senator Cynthia Lummis during a recent interview on FOX Business. Lummis stated that the legislation is intended to strengthen consumer protections, help law enforcement combat illicit finance, and keep digital asset markets operating within the United States. However, the release comes as banking groups continue pushing for tighter stablecoin language despite earlier compromises. According to Punchbowl, Senator Thom Tillis has proposed adding a 'circuit-breaker' provision to address stablecoin-related deposit flight concerns. The proposal would authorize regulators, including the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), to step in if they determine that stablecoin-related activity is causing deposits to leave the banking system at a broader level.
US banking groups have intensified pressure on the Senate to tighten the CLARITY Act's stablecoin yield rules, warning that unclear language could encourage payment stablecoins to compete with traditional bank deposits. According to a joint letter sent Monday to Senate Majority Leader John Thune and Minority Leader Charles Schumer, the American Bankers Association (ABA), the Independent Community Bankers of America (ICBA), and 76 state banking associations asked lawmakers to revise Section 404 of the Digital Asset Market Clarity Act before the bill reaches the Senate floor. The banking groups stated that the current wording does not provide enough certainty to prevent payment stablecoins from offering incentives that resemble interest on deposits, while Section 404 bars direct or indirect interest or yield on payment stablecoins, it still allows activity-based or transaction-based rewards. The July 13 letter specifically targets the section's language, with the groups proposing narrow changes including removing the word 'solely' from subsection (1)(A), cutting phrases 'on a payment stablecoin balance' and 'on an interest-bearing bank deposit' from (1)(B), replacing the 'economically or functionally equivalent' test with a 'substantially similar' standard, and deleting subsection (3)(B) in its entirety.
Senate staff are expected to release a new version of the CLARITY Act this week that will combine proposals from the Senate Banking Committee and add more than 70 pages to the document, including stronger consumer protections. As reported by AMBCrypto, this updated draft comes as passage of the original bill appears increasingly doubtful before Congress takes its annual summer recess. The new version is expected to clarify the rules and regulations pertaining to digital assets, addressing some of the concerns raised by enforcement groups and banking lobbyists who have criticized the bill's current provisions. The Senate Banking Committee approved the bill 15-9 in May, with two Democrats joining Republicans to advance the legislation, though Graham did not serve on the committee and was not a particularly key figure in crypto policy debates.
Crypto players including Coinbase, Circle and Ripple have supported the CLARITY Act, hoping regulation of the industry will encourage investors. However, banks have opposed the bill, warning it could allow crypto groups to offer interest-like payments to stablecoin holders and lead to decreased bank deposits and a lack of capital for loans. Law enforcement and some labor groups also have opposed the measure. The bill has secured support from another major enforcement group, the Federal Law Enforcement Officers Associations (FLEOA), with recent backing by sheriffs clearing a key hurdle initially posed by these groups. FLEOA also urged lawmakers to prevent companies from avoiding regulation by presenting controlled services as decentralised and asked the Senate to replace the bill's 'specific intent' standard with an existing knowledge standard. Five US banking lobbies made similar arguments in an earlier letter this year, with this round sharpening the specific statutory fixes to address the concrete deposit flight risks.
The CLARITY Act is now on the Senate calendar awaiting floor consideration, with Senate Majority Leader John Thune controlling when legislation is brought before the full chamber. If senators approve the measure, the House must also approve the final version before it can be sent to President Donald Trump for signature. Senate leadership is targeting a floor vote before the end of July if negotiations can be completed, though Lummis noted that the final decision rests with Thune. The stablecoin yield is one of three key disputes stalling the bill, with lawmakers remaining split over Section 604 developer protections and ethics rules. While supporters continue to push for action before the recess begins, the final Senate text must still bridge disagreements over stablecoin regulation, banking safeguards and ethics provisions before it can secure the bipartisan backing needed to advance. The transatlantic agreement does not address banking concerns directly, but places significant emphasis on fully backed reserves, customer protections and clear legal treatment of stablecoin assets as both governments continue developing their domestic rulebooks.
