The Clarity Act, a landmark crypto legislation bill, has stalled in the US Senate due to disagreements between banks and cryptocurrency companies. The White House had attempted to broker a compromise on the bill, which would have allowed stablecoin issuers and crypto firms to offer yield-bearing products and rewards. However, banks have refused to support this compromise, citing concerns that it could trigger deposit flight.
The banking industry has been a major obstacle to passing the Clarity Act, with some senators backing their position. The bill must still overcome disagreements among senators over ethics and illicit finance provisions, as well as limited Senate floor time before lawmakers leave Washington in the summer to campaign for mid-term elections.