Banking Groups Seek Stricter Stablecoin Yield Rules in CLARITY Act Ahead of Markup

US banking trade associations are pushing for revisions to the stablecoin yield compromise in the forthcoming CLARITY Act, signaling heightened tensions between traditional finance and crypto innovators. The legislation, expected to advance next week, currently bans passive interest on stablecoins while permitting rewards tied to transactional activity—a design meant to discourage speculative holdings.

Key banking unions including the American Banking Association and Bank Policy Institute submitted proposed language to eliminate perceived loopholes. Their letter emphasizes preventing deposit flight from traditional savings accounts, reflecting concerns over competitive disruption. The move underscores banks' defensive posture as stablecoins blur the lines between payments and yield-bearing assets.