# Wall Street banks clash with crypto lobby over CLARITY Act

**Published:** 2026-08-17T18:08:44.903Z  
**Topic:** Crypto Payments  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/47f6016c-c061-4894-bd2a-88b98f754ca0

Banks oppose the CLARITY Act fearing stablecoin yields could pull billions from deposits; crypto firms lobby hard. See who backs and opposes the bill.

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】.  

| At a glance | |
|---|---|
| Bill | Digital Asset Market Clarity (CLARITY) Act |
| Opposition | JP Morgan, American Banking Association, Community Bankers Association |
| Crypto lobbying spend | $14.6 million in 2025 |
| Key concern | Stablecoin yield programs could pull billions from checking & savings accounts |

## 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.

## Sources
1. Livemint — [Meet the crypto bros who pivoted to AI | Mint](https://www.livemint.com/global/meet-the-crypto-bros-who-pivoted-to-ai-11786363211721.html)
2. Independent Journal Review — [Wall Street Banks Duking It Out With Crypto Bros Over Key Bill](https://ijr.com/article/banking-industry-could-threaten-passage-of-trump-backed-crypto-bill)

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Cite as: TrendWatcher, "Wall Street banks clash with crypto lobby over CLARITY Act", https://www.trendwatcher.in/article/47f6016c-c061-4894-bd2a-88b98f754ca0