U.S. Banks Split Over CLARITY Act Stablecoin Yield Provisions

• Retail banks warn CLARITY Act loopholes could let crypto firms offer yield-like stablecoin products.
• Investment banks support broader crypto legislation, citing clearer rules for trading, staking, and lending.
• Community banks remain split as lawmakers move toward Senate markup after months of negotiations.

A divide is growing among U.S. banks as lawmakers prepare to mark up the CLARITY Act next week following months of negotiations over stablecoin yield rules. According to Crypto In America, large retail-focused banks continue opposing the latest compromise language, while institutions with limited consumer exposure increasingly support advancing the broader crypto legislation.

Major banking trade groups said the revised stablecoin provisions still leave room for crypto firms to offer yield-like products. The Bank Policy Institute, American Bankers Association, and Independent Community Bankers of America criticized the latest text released by Senators Thom Tillis and Angela Alsobrooks.

According to Crypto In America, some retail banks believe firms like Coinbase and Stripe could still structure products resembling interest-bearing accounts. Sources from large consumer banks argued the wording remains too narrow despite language prohibiting “economically or functionally equivalent” banking products.

Meanwhile, these groups plan additional outreach to Senate Banking Committee members before the markup process begins. One banking source told Crypto In America the proposal does not fully eliminate stablecoin yield structures.

However, several institutions without major retail deposit businesses appear more open to the compromise framework. Firms including Goldman Sachs, BNY, and Morgan Stanley reportedly support advancing the legislation.

The CLARITY Act would provide clearer regulatory treatment for crypto-related banking activities. These include trading, staking, lending, and future infrastructure tied to portfolio margining.

Additionally, the legislation limits future regulators from restricting activities considered financial in nature under the Bank Holding Company Act. This structure could expand institutional access to digital asset markets valued near $3 trillion.

Smaller community banks continue debating how stablecoins may affect deposits and lending activity. The Independent Community Bankers of America publicly opposed the current compromise language.

However, some regional lenders privately backed the proposal, according to Crypto In America. One community bank described the framework as a “fair compromise” focused more on payments than savings products.

Meanwhile, lawmakers signaled negotiations may already be complete. Senator Cynthia Lummis stated Monday that the text had been finalized.