U.S. Banks vs. Crypto Companies: Why the CLARITY Act Matters to Market

A compromise version of the CLARITY Act, which is intended to resolve the months-long dispute between banks and crypto companies over stablecoin yields, could be released as early as this week

U.S. lawmakers are close to resolving one of the most contentious issues in cryptocurrency regulation: whether stablecoin holders can earn interest. The dispute has been ongoing for more than six months. According to Senator Tom Tillis, a compromise version of the CLARITY Act, which regulates the structure of the crypto market, could be released as early as this week.

The GENIUS Act, passed last year, prohibits stablecoin issuers from paying interest for holding them, but does not prohibit exchanges and other third-party platforms from offering such an option. This has become the main sticking point for the CLARITY Act: a bill intended to establish comprehensive rules for the U.S. crypto market.

The CLARITY Act is a bill aimed at regulating the activities of crypto exchanges and the circulation of digital assets. A key aspect of this document is also a clear distinction between a “digital commodity” and a “security.”

Banks' position includes a demand to ban yield products for both issuers and companies; otherwise, they estimate that their customers will leave traditional financial institutions. Crypto companies insist that such a ban would hinder innovation, pointing out that these products could open up new opportunities for the banks themselves, not just for crypto firms.

Details or potential terms of the agreement regarding the CLARITY Act have not been disclosed.

When will the CLARITY Act be passed?

Since the beginning of the year, the White House has held several closed-door meetings to resolve the dispute, but no agreement has been reached. However, pressure on lawmakers is now mounting. In early March, U.S. President Donald Trump accused banks of hindering America’s leadership in the cryptocurrency market.

Trump initially set a deadline for passing the bill in the summer of 2025, then expectations shifted to September, then to late November. This year, the agreement has also been postponed several times.

And Senator Cynthia Lummis issued a stern warning: “This is our last chance to pass the CLARITY Act until at least 2030. We cannot afford to sacrifice America’s financial future.”

Lammis outlined this negative timeline scenario against the backdrop of the upcoming midterm elections for the U.S. House of Representatives in November 2026. Their results could radically shift congressional priorities and stall legislation for years. Former White House adviser David Saks also urged: “We must act now.”

Regulatory agencies are also expressing their support for this bill. SEC Chairman (SEC) Paul Atkins stated in early April that “it is time for Congress to provide protection against unscrupulous regulators in the future” and submit it to President Trump for his signature, noting that it would be much more difficult to repeal the law in the event of a future change in the U.S. administration if it wished to alter its policy regarding cryptocurrencies.

Coinbase, the largest crypto exchange and a previous opponent of the bill, had withdrawn its support for the legislation due to disputes over tax treatment. However, on April 10, Coinbase CEO Brian Armstrong publicly stated: “It is time to pass the CLARITY Act.”

And Coinbase General Counsel Paul Grewal confirmed that the bill is “very close” to committee review, citing progress in behind-the-scenes negotiations.

The fact is that Circle, the issuer of one of the largest stablecoins, USDC, although it does not pay interest income to token holders, has been in a partnership with Coinbase for several years. The terms of the partnership between Circle and Coinbase stipulate that each party receives 50% of the income generated from the reserves backing the stablecoin. However, Coinbase receives 100% of this income if the tokens are held on the crypto exchange. Simply put, Circle shares the income from the reserves (U.S. Treasury bonds) backing USDC with Coinbase, which, in turn, offers interest income to its customers.

But even if a compromise is reached this week, the bill must still pass a vote in the Senate Banking Committee, be reconciled with the Agriculture Committee, and then undergo a full vote in both chambers. Despite the optimism, some experts assess the likelihood of the bill passing in 2026 as low.

According to Ron Hammond, head of policy at market maker Wintermute, the chance of the CLARITY Act passing this year is 30%. Without ruling out a positive outcome, he said that “dates are constantly changing and there is light at the end of the tunnel, but there are obstacles along the way.”

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