Banks and Crypto Firms Clash Over Senate's CLARITY Act
Wall Street banks are opposing the CLARITY Act, a crypto-focused bill backed by Republicans and President Trump, citing concerns over stablecoin rewards and potential deposit loss.
The CLARITY Act, a cryptocurrency regulatory proposal largely supported by congressional Republicans and President Donald Trump, is facing stiff resistance from major banking interests. Banks argue that allowing crypto firms to offer yield-bearing stablecoin rewards could siphon billions from checking and savings accounts, undermining the deposit base that underwrites community loans. JP Morgan Chase CEO Jamie Dimon and the American Banking Association have publicly warned that the bill lacks sufficient legal protections for deposits, especially in rural areas.
Crypto advocates such as Coinbase CEO Brian Armstrong and lobbying groups like the Blockchain Association have invested over $14.6 million in 2025 lobbying efforts, portraying the bill as essential for innovation and national security. While some Republican senators, including Josh Hawley and John Curtis, express hesitation due to bank concerns, others like Cynthia Lummis contend that data does not show deposit flight. The Senate recessed in August without a vote, and Senate Majority Leader John Thune plans to bring the measure to the floor in September, pending further negotiations.
Why it matters
The outcome will shape how digital assets are regulated and whether banks or crypto firms dominate future financial services.
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