Author: Blockchain Knight
Although some key U.S. lawmakers are striving to send the bill to the president for signature before July 4, the banking industry is still lobbying hard to kill the CLARITY Act.
It has been stalled in the Senate for months, with the core dispute still revolving around the provisions regarding stablecoins and the revenue rights of digital asset companies.
The recent bipartisan compromise has been met with open resistance from the banking industry. The banking sector argues that the draft threatens the foundation of local lending and could trigger large-scale deposit outflows.
However, supporters of the bill remain confident. Encouraged by the anticipated support from Trump, Senate negotiators are withstanding pressure to pave the way for key committee deliberations during the week of May 11.
The core of the controversy lies in how the CLARITY Act regulates "yield-bearing payment stablecoins." Five major industry groups, including the American Bankers Association and the Bank Policy Institute, jointly criticized Section 404, drafted by the senator, for being full of loopholes.
The banking industry acknowledges that the draft's policy goal is to prohibit the direct payment of yields and interest, but points out that the current text still allows exchanges and intermediaries to distribute benefits under names such as "member rewards," as long as the calculation method is not exactly the same as traditional interest.
The banking coalition believes that allowing rewards to be calculated based on criteria such as holding duration and account balance essentially encourages users to hold stablecoins idly, whereas banks rely on these idle deposits to support community lending.
Its internal research warns that once yield-bearing stablecoin alternatives proliferate, funds available for consumer, small business, and agricultural loans could drop by 20%.
Notably, divisions within the financial industry are intensifying. Large retail banks and community lenders remain strongly opposed, but institutions lacking large consumer deposit departments have shown cautious acceptance of the current framework.
Facing the impasse, lawmakers have launched a counterattack. The senator insists that the draft has gone through a tug-of-war, eliminating the threat of deposit outflows without stifling innovation. The text explicitly prohibits stablecoin rewards from functionally imitating bank deposit interest, and the banking industry has participated in the negotiations throughout.
The countdown for the Senate to advance the legislation has begun. The chairman of the Senate Banking Committee confirmed efforts are underway to push for bipartisan cooperation in May to advance market structure legislation.
In the coming weeks, the focus will be on pushing committee deliberations, aiming to submit the final bill to the president by the end of June.
Supporters warn that failure to pass before the August recess could lead to permanent capital flight, effectively ceding U.S. dominance in the digital asset space.
Despite the banking industry's vigorous lobbying, market sentiment is generally optimistic. The leaders of Ripple and Coinbase have both recently publicly expressed expectations of a structural shift in legislation.
Prediction markets show that the probability of the CLARITY Act becoming law by 2026 exceeds 60%. As the May 11 deliberation approaches, it will soon become clear whether bipartisan momentum can ultimately overcome deeply entrenched fiscal resistance.
