Stablecoin yield fight threatens CLARITY Act progress

Banking opposition has delayed progress on the U.S. CLARITY Act over whether crypto platforms may offer rewards on stablecoins, Beincrypto reports.

Galaxy CEO Mike Novogratz warned that lobbying by banks could sink the broader bill, saying existing law (GENIUS) already permits some stablecoin yield and that banks fear deposit outflows. More than 3,200 bankers have urged lawmakers to close what they call a "payment of interest loophole," while critics say the draft bill favors incumbents by allowing banks to pay interest but restricting crypto platforms to rewards tied to active participation such as staking, liquidity provision or governance. The standoff has also exposed tensions between the White House and crypto firms — a journalist noted the White House "is still mad at Coinbase," though Coinbase CEO Brian Armstrong said talks remain constructive — and figures including Patrick Witt and Consensys lawyer Bill Hughes have urged compromise while warning of harsher or hidden punitive rules; crypto commentator Wendy O warned retail investors could lose (tweet dated January 21, 2026).

The CLARITY Act, which would clarify rules for major crypto assets, developer protections and distinctions between DeFi and TradFi, remains on hold as banks, lawmakers and crypto firms continue to contest how stablecoin yields should be treated and the bill's ultimate fate stays uncertain.

Key Topics

Crypto, Clarity Act, Stablecoin Yields, Mike Novogratz, Genius, Community Banks