The US CLARITY Act has hit an impasse after major banks rejected a White House compromise limiting stablecoin yield rewards to peer-to-peer payments. This follows President Trump's recent criticism of banks and builds on stalled talks over incentives that crypto firms say are vital for innovation. Trump met with Coinbase CEO Brian Armstrong amid the deadlock.
Negotiations on the CLARITY Act—a federal framework for digital assets following last year's GENIUS Act stablecoin rules—have stalled after major banks rejected a White House compromise on yield-bearing rewards for stablecoins, pegged to $1.
As previously reported, the dispute escalated with Trump's March 3 Truth Social post urging Congress to pass the bill and criticizing banks for undermining crypto progress. Banks warn that allowing crypto exchanges like Coinbase to offer yields on stablecoin holdings could siphon up to $500 billion in deposits by 2028, threatening stability. They seek a full ban or bank-like regulations.
The rejected compromise would permit rewards only for peer-to-peer transactions, not idle balances. Crypto firms accept this, but banks oppose it, fearing loopholes. JPMorgan CEO Jamie Dimon called for equal footing under banking rules.
Trump sharpened his stance, posting that banks must compromise and "Americans should earn more money on their money." He met privately Tuesday with Coinbase CEO Brian Armstrong. Senator Cynthia Lummis reiterated urgency: “America can’t afford to wait.” Rep. French Hill expressed optimism for a solution without treating stablecoins as banks.
Debates continue on ethics and AML rules, but Senate time is tight before recess. Analysts warn prospects may fade if Democrats gain in November midterms.
