The CLARITY Act, which aims to introduce comprehensive regulation for digital assets in the United States, was stuck in the Senate Banking Committee after passing with bipartisan support from the House of Representatives. Articles of the law, especially regarding stablecoin returns, lead to intense debates between the banking lobby and crypto companies.
How Did the Stablecoin Conflict Lock Up the Process?
The CLARITY Act aims to define under what circumstances digital assets will be subject to SEC supervision and when they will fall under the jurisdiction of the CFTC. It also clarifies licensing obligations for market participants such as exchanges and custody services. The bill, which was passed by the House of Representatives in July 2025, became the focus of new discussions after being moved to the Senate.
Negotiations in the Senate are particularly focused on the issue of stablecoin returns. Banks are concerned that granting interest or rewards on stablecoins could operate like unlicensed bank deposits. For this reason, they support the additions to the bill that limit stablecoin returns.
Different Approaches Between the Crypto Industry and Banks
Leading representatives of the cryptocurrency industry are of the opinion that banning stablecoin returns will hinder innovation. For example, Coinbase CEO Brian Armstrong emphasized that stablecoin rewards can be managed responsibly and stated that banning such incentives would harm the industry.
Brian Armstrong expressed his belief that banning stablecoin returns would undermine innovation in the industry and the American market would lag behind on a global scale.
A formal vote is still not scheduled in the Senate Banking Committee due to a fundamental divide between the two parties. The bill, in its current form, is not expected to leave the committee and come to the agenda of the general assembly in the near term.
The Role of the White House and the Future of the Law
The White House has recently increased its meeting traffic with both the banking and crypto sides. In particular, it was aimed to reach an agreement regarding the stablecoin yield text before the end of March. However, the fundamental differences between the parties have still not been overcome.
Although organizations such as the American Bankers Association and the Independent Community Bankers Association emphasize that negotiations are still ongoing and efforts towards a solution are ongoing, there is no definitive consensus on the text.
Unresolved Fundamental Issues
The four main topics blocking the process in the Senate are:
- In which cases stablecoin rewards will be included in the scope of prohibited interest,
- How to limit the incentives offered by exchanges to users,
- Finalizing the line of authority between the SEC and CFTC,
- Defining obligations for DeFi developers.
Unless the debate over stablecoin returns is resolved, it remains an obstacle to the advancement of broader digital asset regulations.
The Next Step in the Senate Remains Uncertain
The critical stage in the coming period will be the formal discussion of the bill in the Senate Banking Committee. A voting date has not been determined at this time. Although it is anticipated that it may pass the committee if the parties reach an agreement in March, the risk of the talks being stuck on the election year agenda continues.
