The crypto market structure bill known as the Clarity Act is back for Senate review, with major banks and lawmakers intensifying opposition and lobbying.
A major crypto law is back on Capitol Hill’s agenda, and the pressure campaign around it is ramping up fast.
The Senate is set to revisit the crypto market structure bill dubbed the Clarity Act this week. returning it to the spotlight after renewed momentum within Washington.. The timing matters: the legislation is scheduled to go through markup by the Senate Banking Committee on Thursday. a key step that can still reshape the final text before it moves toward a wider vote.. In the run-up. the American Bankers Association (ABA) moved to rally banks and executives to contact senators. arguing the current draft still leaves room for stablecoins to function in ways that would undercut traditional banking revenue.
On Sunday. while parts of the crypto industry were preparing to celebrate the bill’s return. the ABA sent an email urging immediate outreach to lawmakers.. The ABA’s president and CEO. Rob Nichols. asked CEOs across Wall Street and community banks to encourage their employees to contact senators as well.. His central argument was that even after improvements from an earlier version. the bill does not adequately stop crypto companies from offering interest-like rewards tied to payment stablecoins.. Nichols warned that if that “loophole” remains. customers could shift cash holdings into stablecoins. triggering what he described as a deposit flight that would weaken banks.
The Clarity Act is not a narrow tweak; it is a market structure bill intended to lay out how stablecoins—digital tokens pegged to the value of $1 USD—will be regulated in the United States.. That comprehensive scope helps explain why it has become a lightning rod: the measure is designed to determine the rules for an entire sector rather than solve a limited. preexisting issue in an already-stable regulatory framework.
Its scale has also been visible in the way major players have reacted to different versions of the draft.. In January. just before the Senate Banking Committee began debate on the bill’s version at the time. Coinbase—described as the largest US crypto company—said it would not support that draft.. Coinbase alleged that banks had rewritten the text in a way that would harm crypto long term. helping set off months of intense negotiations over language.
Those negotiations have reportedly moved closer to alignment.. The report stated that after months of talks held at the White House—organized by former special adviser on AI and crypto David Sacks and his administration’s staff—Coinbase reached a compromise with other digital-asset companies and major financial institutions represented in the meetings.. Matter Labs vice president of growth Vassilis Tziokas. who analyzed the current bill. framed the outcome as a workable trade rather than a fully satisfying win for any side.
At the center of that compromise is how the bill handles yields and rewards.. As the language currently stands. the report said stablecoins would not be allowed to offer cash interest yields. but it would not explicitly block yields of other kinds.. That creates a legal pathway for crypto firms to offer activity-based rewards on transactions—compared in the report to the way credit card points can be redeemed for travel or other benefits.. In that framing. the wording could keep the bill from being interpreted as a direct bank-like interest product. while still allowing crypto companies to structure reward programs around user activity.
Even so, the legal drafting appears to be stirring last-minute strategy sessions among the industry.. With words now on paper and the Senate Banking Committee poised to mark up the bill Thursday. major crypto players and traditional finance counterparts are reportedly flowing back to Washington for lobbying. backchannel discussions. and efforts aimed at shaping how senators understand the bill’s likely impacts.
Markup itself is being treated as a crucial window. The committee markup process, the report noted, is one of the last chances to meaningfully change legislation before it is advanced for a full floor vote, and individual committee members can still be influenced by fresh information or persuasion.
The opposition, however, is not portrayed as a single unified front.. Public-facing resistance is coming from community banks—smaller institutions that serve particular regions. states. and towns—rather than from only the biggest Wall Street banks.. The concern. as described. is that smaller banks would be especially threatened if customers move cash holdings into stablecoin products that offer attractive returns or rewards. even if large banks might be better positioned to handle such shifts.
Community banks also carry political weight.. Because they are more locally embedded, they can apply stronger pressure on elected officials than a nationwide institution might.. The report highlighted Sen.. Katie Britt (R-AL) as facing the most pressure in this arena, while Sen.. Thom Tillis (R-NC) is said to be affected as well. in part because his state is home to several major banks. including Bank of America’s headquarters.
A second layer of opposition comes from the largest banks themselves. which are also members of trade associations that include community banks.. In this account, the big banks’ concerns are focused more on wealthy customers than on everyday consumers.. If high-net-worth clients conclude they can earn better returns through stablecoin wallets and companies—whether through interest-like mechanisms or rewards—then those customers might reduce their reliance on bank services.. The report suggested that this is also why it’s less likely to become a straightforward public message for the biggest firms. especially given the difficulty of appealing to sympathy at that scale.
Meanwhile, the report also described a political dimension to the debate beyond financial competition.. Democrats opposing the Clarity Act are pointing to what they describe as a lack of an ethics clause that would restrict government employees. including lawmakers. from profiting from crypto interests while in office.. The report stated this includes President Donald Trump, whose family investments in multiple crypto companies were cited by critics.
Sen.. Elizabeth Warren (D-MA). identified as a harsh critic of the crypto industry and ranking member of the Senate Banking Committee. was quoted in the report arguing that the bill would endanger investors. national security. and the broader financial system.. In the same account. she alleged that the president and his family have gained significantly from crypto deals and that the bill includes no provisions meant to prevent such conflicts.
Behind the scenes, the report portrayed negotiations as increasingly unconventional.. One “last-minute development” mentioned was that a housing-related measure appears to have been rolled into the Clarity Act itself.. Sam Lyman. head of research at the Bitcoin Policy Institute and a close tracker of the bill’s progress. said the appended language involves a federal program—called the Build Now Act—aimed at funding local housing development and attached at the end of the draft.
Lyman’s read of the addition was that it functions as a political accommodation for multiple senators.. He suggested the inclusion of language supported by both Sen.. Warren and Sen.. John Kennedy (R-LA) strengthens the bill’s bipartisan credibility.. He also indicated that Senator Kennedy had been among the few Republicans described as initially dragging his feet. and that the housing language may have helped align him with the bill.. At the same time, he said the measure gives Warren one of her stated concessions.
As the bill moves closer to markup. the report described the public-facing battle as continuing in parallel with the legislative process.. Crypto policy figures were said to have challenged the ABA on X. and the report described the schedule for Coinbase CEO Brian Armstrong as being leaked—though only in the parts portrayed as showing alignment with Republicans rather than Democrats.
The online fight has also included arguments about the quality and framing of research.. The report said the crypto community spent the past day criticizing a paper by Bill Nelson. head of research at the Bank Policy Institute. for allegedly misrepresenting key statistics drawn from research by a Cornell professor on digital assets.. It also mentioned claims that Nelson’s post was written with AI. and that the Cornell professor. Lin William Cong. responded with a detailed rebuttal.
Even with all the policy tension, the report pointed to moments of political irony as well. Lyman noted the contrast between Warren’s broader stance against banks and her positioning in this particular dispute, describing it as a striking irony that, in his view, many people do not immediately see.
For anyone watching the Clarity Act. the sequence of events underscores a broader reality about crypto regulation in the US: the stakes are not only about how stablecoins are defined. but also about how rewards and incentives can be structured within those definitions.. The bill’s treatment of “interest-like rewards” versus “activity-based rewards” is likely to become the fulcrum for much of the coming debate. because it determines whether stablecoins can mimic bank-like returns or instead remain more tightly bounded within transaction-focused models.
With Thursday’s markup approaching. the question is how much the bill’s wording will be tightened—or preserved—under pressure from multiple constituencies: community banks worried about local customers. larger banks focused on high-net-worth behavior. and lawmakers grappling with ethics concerns and broader political risk.. Even if a compromise has brought major crypto and financial institutions closer to agreement. the report’s depiction of intensified backchannel activity suggests that the final outcome may still hinge on details that can be changed in committee.
In the meantime. the clash is playing out both on paper and on screens. with negotiations. lobbying. and public arguments moving at the same speed.. That combination is likely to shape how senators interpret the bill’s real-world effects—particularly whether the industry’s current reading of the “legal window” survives contact with committee scrutiny and whether opponents can close it before the measure reaches the broader floor.
Clarity Act crypto regulation stablecoins Senate Banking Committee American Bankers Association Coinbase lobbying