Talks on landmark cryptocurrency legislation have stalled after banks refused to back a compromise negotiated by the White House, raising doubts over whether the bill will pass this year. President Donald Trump criticised lenders on social media, accusing them of trying to undermine his crypto agenda.
The Clarity Act seeks to create clear regulations for crypto firms and stablecoin issuers, promoting adoption while addressing risks that have limited industry growth. Disagreement centres on whether crypto companies can offer rewards or yield-bearing products, which banks warn could draw deposits away and affect lending.
Crypto companies including Coinbase support the White House compromise, which would allow some rewards for peer-to-peer payments but restrict idle holdings. Banks, however, insist the proposal could still trigger deposit flight. Some senators back the banks’ position, hoping for stricter limits.
The American Bankers Association said lenders have offered constructive ideas to advance the bill without threatening financial stability. Analysts warn the impasse, coupled with Senate disagreements over ethics and illicit finance provisions, may prevent the legislation from passing before the summer recess.
Passage could be further delayed if Democrats gain seats in November, as party lawmakers remain divided on crypto regulation.
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