US House of Representatives approved CLARITY Act The bill received bipartisan support, with 294 votes in favor and 124 against the bill. Unfortunately, success in the House of Representatives did not carry over to the Senate; because the legislation has stalled there, apparently due to the banking industry’s reluctance to make any concessions on how stablecoin holders earn interest or earn returns.
According to a report with Punch BowlSenator Thom Tillis told Senate Banking Committee they need more time to reach a compromise; This pits digital asset firms against legacy banks that fear losing business if stablecoin holders earn returns. The thesis put forward by banks is that higher yields will cause a flight of deposits and weaken their ability to lend. This ignores the fact that legacy banks can compete by increasing the rates they pay depositors to keep them happy.
The report states that the final language could come in May.
Yesterday, Digital Room Sent a letter to the senator Tim ScottThe Chairman of the Senate Banking Committee called for the price increase related to the bill to be heard as soon as possible. In the letter he stated: “It has been 270 days since the House passed the CLARITY Act with strong bipartisan support, and we recognize that Congress’ legislative window is narrowing.”
Taylor BarrDigital Chamber Government Affairs Director, It was stated in X:
“Clarity cannot wait. “The more than 70 million Americans who have adopted digital assets deserve the regulatory clarity they have so long awaited.”
The Senate’s draft bill bans interest on stablecoin balances, while the House version allows passive income. At one point there seemed to be a workaround to allow activity-based rewards, but now it appears the entire bill is in jeopardy.
This raises the question of why the Senate hasn’t shown some leadership and moved forward with language that creates a level playing field for banks and crypto companies to compete, thereby creating value for consumers.
The White House has released a report claiming that fears of a deposit run are unfounded. Still, legacy banks continue to oppose any language that might require them to change their operations.
