Wall Street banks clash with crypto lobby over CLARITY Act

1. The CLARITY Act, a Trump‑backed crypto bill, faces fierce opposition from major U.S. banks that warn stablecoin rewards could trigger massive deposit outflows, while crypto lobbyists pour at least $14.6 million into its passage【2】.

Banking industry’s objections

Bank executives argue the bill would let crypto firms pay “interest” on stablecoins without the legal safeguards that protect traditional deposits. JP Morgan CEO Jamie Dimon said the legislation “has almost no legal protections” and could enable “deposit flight” that threatens banks’ business models【2】. Community banks echo this, warning that stablecoin incentives might divert local deposits that fund mortgages, small‑business loans, and other community projects【2】.

Crypto lobby’s push and political backdrop

Crypto groups, including the Digital Chamber, Coinbase, the Blockchain Association, Kraken and Andreessen Horowitz, have spent at least $14.6 million lobbying for the bill in 2025, with Coinbase alone contributing $1.07 million in Q1 2026【2】. The legislation enjoys broad bipartisan support, but several Republican senators—Josh Hawley, John Curtis, and Bernie Moreno—have signaled hesitation, citing bank concerns and constituent pressure【2】.

Legislative dynamics and next steps

The CLARITY Act aims to create a clear regulatory framework for digital assets, but its treatment of stablecoin yields remains the flashpoint. Senator Cynthia Lummis, a lead sponsor, counters bank claims, noting that household deposits have risen across income groups and that the bill actually tightens rules on stablecoin interest‑like rewards【2】. The bill’s fate now hinges on whether banking groups can stall it or whether crypto supporters can secure the needed protections for stablecoins.

What to watch

• Congressional vote timing – upcoming Senate floor vote on the CLARITY Act.
• Stablecoin yield language – any amendment that softens or tightens Section 404 restrictions.
• Bank lobbying activity – statements from JP Morgan, ABA and community banks in the next weeks.

The showdown underscores a broader clash between legacy finance and the emerging crypto ecosystem, with the outcome set to shape how stablecoins are treated in the U.S. regulatory landscape.