White House Calls in Banks and Crypto Firms as CLARITY Act Stalls
Washington, D.C., Jan. 28, 2026 – In a bid to break a legislative impasse, the Trump administration is set to host a round‑table on Monday that will bring together senior executives from the traditional banking sector and the cryptocurrency industry. The meeting, organized by the White House’s newly created crypto council, will focus on the contentious provisions of the CLARITY Act that govern interest and other reward mechanisms attached to dollar‑pegged stablecoins.
A Bill Caught in a Cross‑Industry Tug‑of‑War
The CLARITY Act, a market‑structure proposal aimed at clarifying the division of oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), has lingered in the Senate for months. Its progress stalled after the Senate Banking Committee postponed a scheduled markup, citing disagreements over how the bill treats yield on stablecoins.
At the heart of the dispute is whether third‑party entities—such as crypto exchanges—should be permitted to offer interest or reward programs on stablecoin holdings. The GENIUS Act, enacted in July 2025, already bars stablecoin issuers from paying interest, but leaves a regulatory gray area for intermediaries. This ambiguity has become a flash point between banking lobbyists and crypto platforms.
Banking Perspective: Guarding the Deposit Base
Bank lobbyists have long argued that allowing yield on stablecoins could trigger a “flight of deposits” from traditional banks, amplifying systemic risk. In a recent public statement, Bank of America CEO Brian Moynihan warned that interest‑bearing stablecoins could siphon up to $6 trillion from U.S. banks, potentially tightening credit availability and pushing up borrowing costs.
Banking representatives view the CLARITY Act’s proposed prohibition on third‑party stablecoin yield as a necessary safeguard to preserve the stability of the broader financial system.
Crypto Industry View: Competition and Innovation at Stake
Crypto exchanges, most notably Coinbase, have pushed back against what they see as an effort to eliminate a competitive avenue. Coinbase CEO Brian Armstrong publicly withdrew the firm’s support for the bill, stating that the company would “rather have no bill than a bad bill.” The exchange and other platforms argue that reward programs are a legitimate service for users and that prohibiting them would unduly favor traditional banks.
Nonetheless, the crypto sector is not monolithic. Several firms and advocacy groups—including Coin Center, a16z, the Digital Chamber, Kraken, and Ripple—have signaled support for the Senate’s version of the CLARITY Act, seeing it as a step toward clearer regulatory guidance.
What the White House Meeting Aims to Achieve
The upcoming discussion, chaired by the White House crypto council, will assemble representatives from industry trade associations to explore a middle ground. Topics on the agenda include:
- Defining the permissible scope of third‑party stablecoin yield.
- Aligning the SEC‑CFTC oversight framework with the realities of digital asset markets.
- Evaluating potential safeguards to mitigate systemic risk while preserving innovation.
White House officials have emphasized that the goal is not to impose a one‑size‑fits‑all solution but to craft policy that balances financial stability with the growth of the emerging crypto ecosystem.
Analysis
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Regulatory Clarity vs. Market Flexibility – The CLARITY Act’s fate hinges on whether lawmakers can reconcile the need for clear, enforceable rules with the dynamic nature of crypto products. Over‑regulation could stifle innovation, while under‑regulation may leave systemic vulnerabilities unchecked.
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Political Leverage – With the Senate Banking Committee’s vote delayed, the executive branch is leveraging its convening power to pressure both sides toward compromise. Successful mediation could restore momentum for the bill.
- Potential Industry Realignment – Should the final legislation restrict third‑party yield, crypto exchanges may pivot toward alternative incentives (e.g., fee rebates, token airdrops) or adjust business models. Conversely, a more permissive framework could encourage banks to explore stablecoin‑related services themselves.
Key Takeaways
- Deadlock persists: Disagreements over stablecoin interest have stalled the CLARITY Act’s Senate passage.
- White House intervention: A high‑level meeting on Monday seeks to bridge the divide between banking lobbyists and crypto firms.
- Stakeholder positions: Banks argue that yield on stablecoins threatens deposit stability; crypto exchanges contend that such restrictions would curb competition.
- Industry split: While major exchanges like Coinbase have withdrawn support, other crypto players back the bill, indicating a nuanced sector stance.
- Outcome implications: The direction of the CLARITY Act will shape the regulatory landscape for digital assets, influencing everything from market structure to systemic risk management.
The meeting’s results could determine whether the CLARITY Act moves forward this year or faces further delays, with significant repercussions for both the traditional banking system and the rapidly evolving cryptocurrency market.
Source: https://cointelegraph.com/news/trump-banks-crypto-clarity-market-structure?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
