White House vs. banks on CLARITY Act

A White House crypto official said banks should “move on” after they kept fighting a Senate compromise on stablecoin rewards in the CLARITY Act. (finance.yahoo.com) The flashpoint is yield, or whether a dollar-backed crypto token can pay users a return. The Tillis-Alsobrooks draft would bar passive yield on idle balances but still allow activity-based rewards, according to reporting on the talks. (finance.yahoo.com) On April 17, Patrick Witt, executive director of the White House Presidential Advisory Committee on Digital Assets, said more bank lobbying looked like “greed or ignorance.” Senator Thom Tillis said negotiators were still “going back and forth” on releasing the text, while Senator Angela Alsobrooks said she expected it “probably” the following week. (finance.yahoo.com) Stablecoins are digital tokens designed to hold a $1 value, usually with reserves in cash or short-term Treasuries. The White House said on April 8 that banning yield would do little to protect lending because the main law already requires one-to-one backing of outstanding coins. (whitehouse.gov) That April 8 White House analysis said eliminating stablecoin yield would increase bank lending by $2.1 billion, or 0.02%, while imposing an $800 million net welfare cost on users. It said community banks would account for $500 million of the added lending under its baseline model. (whitehouse.gov) Banks are arguing the White House is measuring the wrong risk. The Consumer Bankers Association backed a rebuttal by economist Andrew Nigrinis, and the American Bankers Association has warned that as much as $6.6 trillion in deposits could be at risk under weaker limits on stablecoin inducements. (punchbowl.news) (aba.com) The fight sits on top of a law Congress already passed. The GENIUS Act, signed in July 2025, requires stablecoin issuers to keep reserves at least one-to-one and says issuers cannot directly pay interest or yield to holders. (whitehouse.gov) (congress.gov) The CLARITY Act is a separate market-structure bill that passed the House on July 17, 2025 by a 294-134 vote and has been sitting in the Senate Banking Committee since September 18, 2025. The stablecoin-yield dispute has become one of the obstacles to moving it again. (congress.gov) (finance.yahoo.com) The numbers involved are no longer niche. Industry trackers and market coverage have put the stablecoin market above $300 billion in April 2026, which helps explain why the argument has shifted from whether the sector survives to how closely it should resemble a bank account. (finance.yahoo.com) (msn.com) The immediate question is whether senators release text and clear committee in April. Witt’s message to banks was blunt, but the bill’s path still runs through the same lawmakers the banks are lobbying. (finance.yahoo.com)