The momentum behind the crypto market structure bill, the CLARITY Act, continues to face new obstacles. It is now clear that banks, especially community banks that support rural America, will not support the bill.
In a statement On April 29, the Independent Community Bankers of America (ICBA), the trade group for small banks, said Americans overwhelmingly support its fight against stablecoin yield. According to its poll, 73 to 74 percent favor community banks making local lending decisions.
Additionally, 62-65% of adults surveyed said policymakers should ensure crypto policy preserves access to insured deposit accounts and avoids harming bank lending in local communities. The move comes ahead of the ICBA Capital Summit scheduled for April 29 to May 1, 2026. The conference will bring together lawmakers and regulators.
And the industry aims to oppose the recent stablecoin yield agreement at the summit, as ICBA CEO Rebecca Romero noted.
ICBA is proud to continue helping community banks advocate in Washington and generate $4.1 trillion in total lending activity in local communities across the country.
White House criticizes community banks over CLARITY Act
In response, Patrick Witt, crypto advisor to US President Donald Trump, criticized ICBA’s position and said:
The ICBA is doing its members a great disservice on this issue. As has been communicated ad nauseam to their leaders, an outright ban on stable rewards is dead on arrival.
Witt sternly warned the trade group, emphasizing that “pay at stupid games, win stupid prizes.” Indeed, the failure to pass the CLARITY Act would leave the GENIUS Act as it is, notably authorizing a stable yield of coins via intermediaries.
In fact, the ICBA report estimates that its members could face a liquidity gap of $850 billion and a bank deposit flight of $1.3 trillion if the stable yield of coins through intermediaries continues.
But from the fallout above, one thing has become clear: banks want an outright ban on stablecoin yield, not a compromise. And the question of yield is not the only obstacle. Sen. Thomas Tillis (R-N.C.), one of the lead negotiators of the recent performance agreement, called that ethical language be included in the bill before it moves forward.
Additionally, Tillis wants lawmakers to address concerns raised by law enforcement groups. The groups opposed the project “safe harbor” coverage or exemption for certain developers of decentralized platforms.
Although Coinbase’s Paul Grewal argued that CLARITY strengthens enforcement, the latest issues could further derail the May Senate markup, not to mention the floor vote.
Final summary
- White House Warns ICBA Stablecoin Yield Lockdown Could Backfire on Community Banks
- Additionally, regulatory safeguards, developer protections, and ethical issues threaten to derail the crypto bill.
