Banks Reject Stablecoin Yield Deal; CLARITY Act Faces 60-Vote Test

In a July 23 statement, the Bank Policy Institute said the CLARITY Act draft contains gaps on stablecoin yield and measures to prevent illicit finance and urged stronger language. Bank groups have opposed a compromise in the draft that would ban passive yield on idle stablecoin balances while permitting incentives tied to account activity.

The compromise appears in Section 404 of the draft bill. That section would bar passive yield on idle stablecoin balances but allow rewards or incentives linked to account activity. Banking trade groups want a broader ban on any form of stablecoin yield or incentive and have lobbied lawmakers for tighter restrictions.

Lobbying by banks has influenced several senators. Senators John Curtis of Utah and John Cornyn of Texas have raised concerns aligned with the banking industry and are withholding or re-evaluating their support. Republican headcount in the Senate fell after the reported death of Senator Lindsey Graham this month and an extended illness sidelined Senator Mitch McConnell, leaving the GOP with 51 members. If Curtis and Cornyn decline to back the bill, Republican support would fall to 49, meaning negotiators would need 11 Senate Democrats to reach the 60 votes required to overcome a filibuster.

Some Democrats previously seen as crypto-friendly are also holding back. Senators Angela Alsobrooks and Ruben Gallego have criticized the bill’s ethics and illicit-finance provisions and said the current language does not resolve their concerns.

Time is tight. The Senate is scheduled to recess for August in about two weeks. Senate Majority Leader John Thune said, “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 crypto adviser Patrick Witt urged Thune to set a vote schedule and not wait for unanimous Democratic agreement, telling reporters, “You’d be waiting forever.” Witt added that a new ethics provision, which he said includes the President, has “real teeth.”

Market indicators reflected the uncertainty; a prediction market briefly cut the probability of the bill’s passage in 2026 to about 32 percent. Negotiators continue discussions to address banks’ concerns on yield, lawmakers’ ethics and enforcement demands, and critics’ illicit-finance questions ahead of the recess.