Banking Giants Split Over Stablecoin Yields as CLARITY Act Debate Intensifies

Goldman Sachs and Morgan Stanley are breaking ranks with traditional banking coalitions to support stablecoin yield provisions in the contested CLARITY Act legislation. The shift reveals a growing divide between consumer-facing lenders fearing deposit outflows and institutional players eyeing crypto market opportunities.

Senators Tillis and Alsobrooks' compromise language has become a flashpoint. While trade groups dig in against yield-bearing stablecoins, capital markets-focused institutions now view the bill as a gateway to digital asset participation—provided ethics provisions satisfy congressional holdouts.

The schism reflects fundamental business model differences. Retail-heavy banks see dollar-pegged tokens as existential threats to their deposit bases. Meanwhile, Goldman and peers appear willing to absorb the disruption for first-mover advantage in crypto custody and trading.