Bank–Crypto Clash Slows Senate Clarity Act Progress

• Dispute over stablecoin reward programs between banks and crypto firms has slowed progress on the Senate Clarity Act.
• Banks warn rewards could trigger deposit flight, while crypto advocates say evidence of major shifts is limited.
• Lawmakers including Sens. Alsobrooks and Tillis are negotiating compromises to advance the crypto bill.

A dispute between banks and crypto firms over stablecoin rewards has stalled progress on the Senate’s Clarity Act. Speaking Tuesday at the American Bankers Association Summit in Washington, D.C., Senator Angela Alsobrooks addressed the conflict directly. According to Crypto In America, lawmakers now seek compromises to move the crypto market structure bill forward.

Senators Seek Middle Ground on Stablecoin Rules

Senator Angela Alsobrooks spoke with American Bankers Association policy chief Naomi Camper during the summit discussion. She said negotiations may leave both industries partly dissatisfied.

Alsobrooks explained that lawmakers must balance innovation with financial stability concerns. She added that compromise remains necessary to advance the Clarity Act. The senator has worked with Senator Thom Tillis on possible legislative adjustments. Both lawmakers recently met with banking and crypto stakeholders to review draft text.

According to Alsobrooks, the proposal aims to introduce guardrails while supporting new financial technologies. The discussions followed negotiations previously organized by the White House.

Banks Warn About Deposit Flight Risks

The central disagreement concerns whether crypto firms should offer rewards on stablecoin holdings. Community banks argue such incentives could draw deposits away from traditional accounts.

Naomi Camper emphasized that smaller banks worry about potential deposit flight. Customers might move funds to higher-yield stablecoin products offered by crypto platforms. However, crypto advocates dispute those concerns.

They argue stablecoin reward programs already exist without triggering large deposit shifts. White House Crypto Council Executive Director Patrick Witt also addressed the issue publicly. Writing on X, he questioned whether deposit flight has actually occurred.

Meanwhile, negotiations continue as lawmakers seek agreement on the remaining provisions. Senate Banking Committee action depends on resolving these differences.

Regulators Explore Closer Coordination

While legislative talks continue, regulators also discussed closer cooperation. SEC Chair Paul Atkins outlined several proposals during a futures industry conference in Boca Raton.

Atkins said regulators should end overlapping enforcement actions between the SEC and CFTC. Instead, both agencies could align legal theories when investigating the same conduct.

He also proposed substituted compliance between regulatory regimes. Under that model, firms meeting one agency’s standards could satisfy similar requirements elsewhere. Additionally, the SEC plans to launch a harmonization webpage for coordinated guidance requests. The agencies may also hold joint meetings for new financial product applications.

Meanwhile, discussions continue about relocating the CFTC near the SEC headquarters in Washington. According to a CFTC source cited by Crypto In America, officials still review several potential locations.