Progress on the CLARITY Act, a long-delayed U.S. crypto market structure bill, remains stalled amid banking industry opposition to stablecoin rewards, even as White House Crypto Advisor Patrick Witt intensifies his push for the legislation’s passage. Key policy disputes across Senate committees continue to hold up a compromise and any timeline for a vote.
White House Advisor Presses Case for CLARITY Act
Witt this week urged lawmakers to keep the CLARITY Act “pro-innovation,” criticizing efforts he described as attempts to turn the bill into an anti-competition framework. In a social media post, he called those efforts “shameful.”
His comments follow President Donald Trump’s recent support for the digital asset sector. The President has alleged that banks are working to undermine both a broader crypto framework and the GENIUS Act, signed last year, despite reporting strong profits.
Banking Industry Pushback Centers on Stablecoin Rewards
The most contentious sticking point is whether issuers or intermediaries should be permitted to offer stablecoin rewards or yield products. Traditional banks argue such products could pull deposits from regulated institutions, constraining capital available for local lending.
Witt challenged that premise, noting that crypto platforms have offered yield on stablecoins “for years.” “Where is the deposit flight?” he wrote, questioning claims that allowing rewards now would trigger large-scale outflows. Crypto industry executives similarly argue that limiting rewards would curb consumer choice and protect bank profit models at the expense of competition.
Unresolved Policy Disputes Stall Timeline
Beyond stablecoin rewards, several policy areas remain under negotiation. Some Democratic senators are seeking stronger anti-money laundering safeguards, measures addressing risks associated with decentralized finance (DeFi), and tighter restrictions on personal crypto holdings for senior government officials.
The Senate Agriculture Committee has advanced its section of the bill, but the Senate Banking Committee continues to deliberate on outstanding issues. Witt has previously warned that failure to compromise could mean no limits on intermediaries offering stablecoin rewards—an outcome he said would contradict concerns about deposit flight. For now, no schedule for a final compromise or floor vote has been set, leaving the bill’s future uncertain.