{"id":37358,"date":"2026-03-05T19:21:44","date_gmt":"2026-03-05T19:21:44","guid":{"rendered":"https:\/\/cryptomag.finance\/?p=37358"},"modified":"2026-03-05T19:21:44","modified_gmt":"2026-03-05T19:21:44","slug":"crypto-legislation-stalls-in-washington-as-banks-white-house-clash-over-stablecoin-yields","status":"publish","type":"post","link":"https:\/\/cryptomag.finance\/?p=37358","title":{"rendered":"Crypto Legislation Stalls in Washington as Banks, White House Clash Over Stablecoin Yields"},"content":{"rendered":"

Bitcoin Magazine<\/a>
\n
\nCrypto Legislation Stalls in Washington as Banks, White House Clash Over Stablecoin Yields<\/a><\/p>\n

<\/div>\n

Talks over landmark U.S. cryptocurrency legislation have hit a fresh impasse<\/a> after major banks rejected a compromise brokered by the White House, casting uncertainty over whether the bill will pass this year.\u00a0<\/p>\n

The stalemate has drawn criticism<\/a> from President Donald Trump, who accused financial institutions of trying to undermine the effort.<\/p>\n

Trump, whose family is well invested<\/a> in digital assets and bitcoin, posted on Truth Social: \u201cWe are not going to allow them to undermine our powerful Crypto Agenda.\u201d He added that banks \u201cneed to make a good deal with the Crypto Industry\u201d to advance legislation that he says is in the public interest.<\/p>\n

The stalled<\/a> legislation, known as the CLARITY Act, follows last year\u2019s GENIUS Act, which created the first federal framework for stablecoin issuers. Supporters of the CLARITY Act argue it is needed to provide clarity for cryptocurrency firms, which have been operating in a regulatory gray area that executives say has stymied growth and innovation.\u00a0<\/p>\n

The bill would give a defined regulatory framework over digital assets, potentially accelerating adoption across the financial system.<\/p>\n

The core dispute involves whether crypto exchanges should be allowed<\/a> to offer yield-bearing rewards on stablecoins, digital tokens designed to maintain a $1 value. Banks warn that allowing such yields could siphon deposits from traditional bank accounts, threatening lending operations that are central to the economy.\u00a0<\/p>\n

Financial institutions are pushing for a ban on stablecoin yield payments as part of the legislation, citing risks to financial stability.<\/p>\n

Crypto firms, including Coinbase, counter that restrictions on rewards programs would be anticompetitive and stifle innovation.<\/p>\n

Stablecoins are at the root of the crypto conflict<\/h2>\n

Stablecoins, they argue, must be able to offer incentives to attract customers. Analysts estimate that by 2028, stablecoins could divert up to $500 billion in deposits away from U.S. banks. In January, the Senate Banking Committee postponed a scheduled markup of the bill after amendments limiting stablecoin rewards were introduced, leaving the legislation stalled.<\/p>\n

The White House has attempted to mediate the conflict. Sources say its compromise would permit stablecoin rewards in limited circumstances, such as peer-to-peer payments, but not on idle holdings.\u00a0<\/p>\n

Crypto companies have signaled willingness to accept this compromise<\/a>, while banks have maintained opposition, arguing that even these limited rewards could trigger deposit flight. Some senators support the banks\u2019 position, believing it could strengthen their negotiating leverage.<\/p>\n

JPMorgan Chase CEO Jamie Dimon has called for stablecoin yield programs to be regulated under bank-like rules to ensure a level playing field.\u00a0<\/p>\n

Meanwhile, President Trump has framed the issue as one of fairness for consumers, writing that \u201cAmericans should earn more money on their money\u201d and describing the CLARITY Act as essential to maintaining the U.S.\u2019s global leadership in cryptocurrency.<\/p>\n

Trump\u2019s engagement with the crypto sector extends beyond social media. He met privately on Tuesday with Coinbase CEO Brian Armstrong, aligning publicly with Coinbase\u2019s position against the banking industry\u2019s restrictions.<\/p>\n

It remains unclear whether the meeting was a formal sit-down or part of broader discussions with industry representatives.<\/p>\n

Lawmakers continue to debate broader elements of the CLARITY Act, including ethics and anti-money-laundering provisions, while Senate floor time before the summer recess is limited.\u00a0<\/p>\n

Analysts say<\/a> the chances of passing a crypto bill may shrink further if Democrats gain seats in November, given the party\u2019s more divided stance on federal crypto regulation.<\/p>\n

\n
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JUST IN: \"\ud83c\uddfa\ud83c\uddf8\" Senator Lummis says, \u201cThe CLARITY Act locks in protections anti-digital asset leaders like Elizabeth Warren can\u2019t undo.\u201d<\/p>\n

\u201cLet\u2019s get this done before it\u2019s too late\u201d \"\ud83d\ude4c\" pic.twitter.com\/kQlsAxr6Yy<\/a><\/p>\n

\u2014 Bitcoin Magazine (@BitcoinMagazine) January 23, 2026<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Senator Cynthia Lummis echoed the president\u2019s urgency, stating<\/a>, \u201cAmerica can\u2019t afford to wait. Congress must move quickly to pass the CLARITY Act.\u201d\u00a0<\/p>\n

Republican Congressman French Hill, speaking on Fox News, stressed that stablecoins should not be treated as banks, arguing that rulemaking should ensure parity between bank and non-bank issuers regarding sales practices and incentives.\u00a0<\/p>\n

\u201cI think we can find a solution here,\u201d Hill said, emphasizing that a balanced framework is achievable if regulators act judiciously.<\/p>\n

This post Crypto Legislation Stalls in Washington as Banks, White House Clash Over Stablecoin Yields<\/a> first appeared on Bitcoin Magazine<\/a> and is written by Micah Zimmerman<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin Magazine Crypto Legislation Stalls in Washington as Banks, White House Clash Over Stablecoin Yields Talks over landmark U.S. cryptocurrency legislation have hit a fresh impasse after major banks rejected a compromise brokered by the White House, casting uncertainty over whether the bill will pass this year.\u00a0 The stalemate has drawn criticism from President Donald […]<\/p>\n","protected":false},"author":1,"featured_media":37359,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[],"tags":[],"class_list":["post-37358","post","type-post","status-publish","format-standard","has-post-thumbnail"],"yoast_head":"\nCrypto Legislation Stalls in Washington as Banks, White House Clash Over Stablecoin Yields - Cryptomag<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptomag.finance\/?p=37358\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Crypto Legislation Stalls in Washington as Banks, White House Clash Over Stablecoin Yields - 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