Clarity Act Stalls as Banks Reject Stablecoin Reward Compromise

The crypto industry is facing another hurdle in its quest for regulatory clarity as the Clarity Act negotiations stall once again. Banks have rejected a White House compromise on stablecoin rewards, citing concerns that these incentives could drive deposit flight from traditional lenders.

Standard Chartered has estimated that stablecoins could pull nearly $500 billion from U.S. bank deposits by 2028 if rewards are allowed. In response to the White House's revised proposal, which limits rewards to peer-to-peer payments, banks have pushed for further limitations on reward programs.

The Senate Banking Committee controls the bill's text but has offered no comment on the current stalemate. Industry insiders warn that missing a July deadline could close the legislative window until after the midterm elections, setting back digital asset reform for years.