CLARITY Act Standoff: Digital Chamber Fires Back at Banks Over Stablecoin Yields
The fight over the CLARITY Act is heating up in Washington. This key bill for US digital asset rules now faces a big challenge: a direct...
Quick overview
- The CLARITY Act is facing significant opposition in Washington, particularly between the Digital Chamber and the banking lobby regarding stablecoin rewards.
- Major U.S. banks argue that interest-bearing stablecoins could destabilize the financial system by diverting deposits from traditional accounts.
- The Digital Chamber is willing to compromise by conceding static rewards on idle stablecoin holdings while insisting on maintaining rewards for active transactions.
- With the 2026 midterms approaching, lawmakers are under pressure to pass the CLARITY Act by March 1st to avoid regulatory stagnation.
The fight over the CLARITY Act is heating up in Washington. This key bill for US digital asset rules now faces a big challenge: a direct clash between the Digital Chamber and the banking lobby about stablecoin rewards.
The ‘Save our Deposits’ Battle: Banks vs. Blockchain
The main issue is the ‘Yield and Interest Prohibition Principles.’ Major U.S. banks say that stablecoins paying interest could threaten the system by pulling deposits out of traditional savings accounts and moving them to digital wallets.
The Digital Chamber’s ‘Scalpel’ Strategy
Cody Carbone, CEO of the Digital Chamber, has introduced a new plan that aims to compromise while still protecting key crypto features. ‘We are willing to use a scalpel, not a chainsaw,’ he said, a view shared by White House advisors.
- The Concession: The crypto industry is ready to give up static rewards on ‘idle’ stablecoin holdings, which are most like a bank savings account.
- The Red Line: However, the Digital Chamber refuses a total ban and wants to keep rewards for active transactions and DeFi liquidity.
- The Study: The group is open to a two-year study on how bank deposits are affected, as long as it does not lead to automatic ‘kill-switch’ rules.
US SENATE VOTING ON CLARITY ACT HAS BEEN CANCELLED 🚨
And most people don't know the exact reason behind this.
Today, the Coinbase CEO said that they won't support the Crypto Market Structure Bill.
And here are some reasons:
1) No yield on stablecoins
The Clarity Act will… pic.twitter.com/zTSSkzEbCD
— Crypto Rover (@cryptorover) January 15, 2026
Key Comparison: Where Stakeholders Stand
There is still a big gap between the ‘Yield Prohibition’ and ‘Innovation Protection’ groups, as shown in the table below:
| Issue | U.S. Banking Proposal | Digital Chamber Framework |
| Idle Yield | Total Blanket Prohibition | Willing to Concede/Ban |
| Active Rewards | Opposed (seen as loophole) | Strictly Protected (for growth) |
| DeFi Liquidity | No exemptions | Essential Exemption (Section 404) |
| 2-Year Study | Mandatory with Auto-Rules | Accepted (No Auto-Rulemaking) |
Legislative Clock: The ‘Midterm Trap’
Passing the CLARITY Act is urgent not only for market stability but also because of timing. Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, warned this weekend that the chance for a bipartisan win is ‘rapidly closing.’
‘Let’s not let any moss grow here,’ Witt said. ‘We have trillions in institutional capital sidelined, waiting for this specific legal certainty.’
With the 2026 midterms coming up, lawmakers worry that if there is no deal by March 1st, the bill could be put on hold for good. This would leave the U.S. in a regulatory ‘no-man’s land’ while places like the UK and EU finish their own rules (FCA’s September 2026 deadline).
What to Watch Next
The next two weeks will be crucial for the CLARITY Act. Traders and institutions should watch for:
- White House ‘Crunches’: Look out for news about a third high-level meeting between bank CEOs and crypto leaders.
- The “GENIUS Act” Overlap: Since the GENIUS Act (signed July 2025) already covers some stablecoin reserve issues, any conflict with the CLARITY Act could cause legal problems.
- Dollar Dominance: The Digital Chamber has warned that too many rules could push users to foreign stablecoins, which could threaten the U.S. Dollar’s lead in digital assets.
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