The Clarity Act has been a crucial piece of legislation in the effort to regulate digital assets and promote wider adoption. However, its progress has been hindered by a stalemate between the White House and banks over the terms of stablecoin rewards.
Banks have expressed concerns that yield-bearing rewards could drive deposit flight from traditional lenders, with Standard Chartered estimating that stablecoins could pull nearly $500 billion from U.S. bank deposits by 2028. In contrast, crypto companies argue that these incentives are essential for promoting competition and growth in the industry.
The White House has proposed a compromise that would allow stablecoin rewards only for peer-to-peer payments, while banning them on idle holdings. However, this proposal has been rejected by banks, which are pushing for further restrictions on reward programs.