The banks are very anxious about stablecoin options that provide customers rewards of over 5%. For them, permitting stablecoins unfettered entry will power depositors to flee from native banks.
In reality, the perceived deposit flight has prompted banks to undertake a hardline stance towards the crypto market construction invoice – The CLARITY Act. Efforts to achieve a deal between banks and the crypto business on stablecoin yield have been futile.
Now, the banks are publicly pushing again towards White Home’s name for a compromise on the identical to advance the CLARITY Act. The most recent to dissent towards the White Home is Christopher Williston, President of the Impartial Bankers Affiliation of Texas.
He cautioned,
“Compromise on CLARITY is compromising native lending and financial manufacturing. It’s merely unimaginable to roll over within the struggle for liquidity that powers the economies of the locations we name house. This isn’t onerous to grasp, of us.”
White Home warns banks over ‘no compromise’ stance
Nevertheless, Trump’s crypto advisor, Patrick Witt, disagreed with Williston’s argument. In line with Witt, banks stand to lose extra in the event that they keep the robust, hardline place.
“No compromise on CLARITY means no restrictions on intermediaries providing stablecoin rewards. When you imagine the banks’ argument about deposit flight, this is able to be catastrophic. Appears like I’m watching an arsonist threaten to burn down their very own house.”
Supply: X/Patrick Witt
Right here, it’s value noting that the U.S stablecoin regulation, the GENIUS Act, which was handed final 12 months, permits issuers to pay rewards by intermediaries similar to crypto exchanges and DeFi protocols.
As such, even when banks withdraw assist for the CLARITY Act, the stablecoin rewards will nonetheless proceed by way of intermediaries.
The CLARITY Act deadlock turned evident this week as President Donald Trump and his son Eric Trump slammed huge banks for undermining the White Home crypto agenda.
Surprisingly although, the market remains to be pricing a 71% chance of the crypto invoice being handed this 12 months.
That stated, the White Home’s foremost push for stablecoins is its potential to service U.S Treasury debt cheaply. In reality, latest research has proven that stablecoins have grow to be a marginal purchaser of the U.S Treasury payments ($153 billion as of December 2025).
Supply: BIS
In addition to, the report added that stablecoins typically drive T-bill yields decrease by over 3.5 foundation factors (bps). Nevertheless, stifling stablecoin rewards may sluggish the sector’s progress and White Home’s long-term strategic purpose.
Closing Abstract
- Trump’s crypto advisor warned banks that they might endure “catastrophic” loss in the event that they don’t compromise on the CLARITY Act.
- Stablecoins purchased $153 billion of U.S T-bills, making it the third largest purchaser of 2025.
