Banks oppose CLARITY Act stablecoin yield language

On July 23 the Bank Policy Institute wrote that the CLARITY Act draft has “shortcomings” on stablecoin yield and illicit finance provisions that should be “strengthened,” a development that could affect the bill’s bid to reach 60 Senate votes before the August recess.

Section 404 of the draft offers a compromise on yield rules: it permits incentives tied to account activity while banning passive payments on idle stablecoin balances. Banks had lobbied for a complete ban on any form of stablecoin yield or incentive, and the BPI said key sections require tougher language.

Industry lobbying has prompted concern among some lawmakers. Two Republican senators, John Curtis of Utah and John Cornyn of Texas, have raised objections aligned with banking industry views. If either withholds support, Republican backing would fall from about 51 active senators to 49, which would require 11 Democrats to reach the 60 votes needed to overcome a filibuster.

Republicans count about 51 active senators after recent roster changes, including the absence of Sen. Lindsey Graham and an extended illness for Sen. Mitch McConnell.

Several Democrats who have previously expressed pro-crypto views, including Angela Alsobrooks and Ruben Gallego, have opposed the draft, citing concerns about the bill’s ethics and illicit finance language.

Time is limited. Senate Majority Leader John Thune warned the measure may not advance before the Senate breaks for the August recess, saying, “I don’t think we’ll be able to get them done. I would like to get at least Clarity started. We’ll see where the votes are.”

White House senior crypto adviser Patrick Witt urged Thune to schedule a vote rather than wait for additional Democratic agreement, arguing, “You’d be waiting forever,” and describing a new ethics provision as having “real teeth” and covering the President.

Market indicators reflected growing uncertainty: betting markets briefly pushed the probability of the bill passing in 2026 down to about 32% on Friday.

Beyond yield, the BPI highlighted anti‑money‑laundering and illicit finance measures as needing stronger standards. Critics from banking and crypto groups have also raised concerns about enforcement and ethics safeguards. Sponsors and opponents continue negotiating language on yield, enforcement and ethics as the Senate moves toward the August recess.