A coalition of six top U.S. banking trade groups, representing Wall Street giants and community banks, issued a statement Friday expressing concerns about new language in the Clarity Act compromise regarding stablecoin yield. The banking groups argue that the proposed exceptions could allow crypto companies to evade the intended prohibition on stablecoin rewards, potentially disrupting traditional banking by making low-yield savings accounts less attractive. The compromise, drafted by Senators Thom Tillis and Angela Alsobrooks, would ban payments “economically or functionally equivalent” to interest on stablecoins but allows rewards tied to governance, validation, staking, or user account balances. The banking groups request striking the account balance reference and changing “economically or functionally equivalent” to “substantially similar” to close loopholes, citing potential programs like money market mutual fund structures or flat monthly rewards increasing with balance. For wallet and key holders, the outcome could affect stablecoin yield opportunities. If banking groups succeed, stablecoin rewards may be severely restricted, reducing passive income options. Conversely, if crypto companies prevail, users may see more innovative yield products. The bill’s progression is urgent, as the Senate faces a tight schedule before midterm elections, with pro-crypto Senator Moreno warning that failure this month could delay digital asset legislation indefinitely.

Key facts

• Banking trade groups claim proposed stablecoin yield ban contains loopholes for crypto companies.
• Compromise language prohibits interest-like rewards but allows rewards for governance, validation, staking, and account balance references.
• Banks request striking account balance references and replacing 'economically equivalent' with 'substantially similar'.
• Senate Banking Committee vote expected within weeks; failure could delay crypto legislation indefinitely.
• Outcome will determine whether stablecoin holders can earn rewards similar to bank interest.