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Promote with Leviathan NewsThe Digital Asset Market CLARITY Act, a flagship U.S. crypto market structure bill, has run into a fresh impasse over how stablecoin rewards are treated, undermining a White House–brokered compromise and clouding prospects for passage this year. The latest draft, shaped by a May deal in the Senate Banking Committee, would broadly ban passive yield on stablecoins held through intermediaries—such as earning interest simply by parking USDC or USDT on an exchange—while still allowing rewards tied to active use, like trading, payments, or liquidity provision. This approach was meant to align with last year’s restrictions on yield paid directly by issuers, close perceived loopholes for exchanges, and give banks clearer protection for deposits that might otherwise flow into stablecoin products. According to coverage of the negotiations, major U.S. banks and their trade groups have now rejected the White House compromise on stablecoin rewards, arguing that it does not go far enough to prevent stablecoins from competing with traditional deposits and money-market products, and that it leaves too much room for nonbank platforms to offer yield-like incentives. Their resistance has contributed to a four‑way deadlock among the banking lobby, crypto firms, congressional negotiators, and the administration, stalling efforts to reconcile Senate and House versions of the bill and raising the risk that the CLARITY Act will miss the narrow pre–election legislative window. Former President Donald Trump has publicly criticized the banks for obstructing the legislation, framing them as protecting legacy interests at the expense of regulatory clarity and innovation in digital assets, and his comments have intensified the political spotlight on the standoff. The stakes are high because the CLARITY Act is designed to provide the first comprehensive federal framework distinguishing when a token is a security versus a commodity, to formalize the roles of the SEC, CFTC, and banking regulators, and to set durable rules for exchanges, stablecoins, and some DeFi developers. Analysts note that if the impasse is not resolved before the summer recess, the current patchwork of enforcement-driven guidance and interim stablecoin rules is likely to persist well into 2027, prolonging legal uncertainty for U.S. exchanges, token issuers, and institutional investors weighing on‑chain products. The dispute over stablecoin rewards has therefore become the central fault line that could determine whether crypto markets in the U.S. get a coherent statutory regime in the near term or remain governed largely by case‑by‑case regulatory actions.
AI-generated background, compiled from web sources — not editorial content.
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