The CLARITY Act Standoff: Why US Banks Want to Ban Your Stablecoin Yield
Wall Street is sounding the alarm as the CLARITY Act hits a deadlock in the Senate. Facing a potential $6 trillion deposit flight, US banks are lobbying for an outright ban on stablecoin "rewards" to protect their traditional lending model from high-yield crypto competition.
📊Trend Analysis: The War for Your Dollars
The quiet halls of the White House recently hosted a high-stakes "Crypto Summit" that ended in a stalemate. At the heart of the conflict is the Digital Asset Market CLARITY Act of 2026. While the bill was designed to finally provide a federal framework for digital assets, it has instead ignited a "civil war" between TradFi giants and the crypto industry.
-> The $6 Trillion Threat
Bank of America CEO Brian Moynihan recently warned that if yield-bearing stablecoins are codified into law, traditional banks could see a massive exodus of deposits. With $USDC and $USDT (via its new USAT variant) offering yields significantly higher than the average 0.05% savings account, the math for consumers is simple. Bankers argue this "deposit flight" would kneecap their ability to provide mortgages and small business loans—the lifeblood of the "Main Street" economy.
-> The "Ban" Proposal
Leaked documents from the negotiations show banking groups are pushing for a "principles-based" ban on any financial consideration paid to stablecoin holders. This would effectively turn stablecoins into sterile payment tools, stripping away the 3–5% yields currently enjoyed by DeFi users.
-> Industry Backlash
Crypto advocates, led by Coinbase and the StandWithCrypto movement, are fighting back. They argue that yield is a "fundamental feature" of digital assets and that banning it is anti-competitive protectionism for failing bank models.
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