Bank opposition stalls CLARITY Act progress over stablecoin rewards debate
Witt says banks are stalling the CLARITY Act over stablecoin rewards. The White House crypto adviser urges passage as Senate talks drag with no timeline.
On Tuesday, Patrick Witt called to keep the bill “pro‑innovation” and blasted efforts to turn it into an anti‑competition measure as “shameful.” He posted this on X.
His remarks follow Donald Trump’s backing of a crypto market structure framework. Trump alleged banks are undermining the framework and the GENIUS Act signed last year.
On Wednesday, Witt pushed back on claims that stablecoin rewards would trigger bank deposit flight. He wrote:
“Arguably my favorite part of this rewards/yield debate has been when bankers say, ‘if we allow this, then we’ll see massive deposit flight.’ Crypto has already been offering rewards/yield on stablecoins FOR YEARS. Where is the deposit flight? Is it in the room with us right now?”
Witt earlier warned that without a compromise, intermediaries could face no limits on offering stablecoin rewards. He framed that as risky if bank “flight” fears are true.
What’s holding the bill:
- Banks oppose allowing stablecoin rewards, citing deposit flight risk
- Some Democrats seek tougher AML rules, DeFi risk measures, and stricter limits on senior officials’ personal crypto holdings
Process update. The Senate Agriculture Committee cleared its section. The Senate Banking Committee is still negotiating outstanding issues. No date for a compromise.
