In today’s CLARITY Act news, the American Bankers Association and the Bank Policy Institute issued a joint statement on Monday, May 4, 2026, formally opposing the stablecoin yield provisions incorporated into the latest Digital Asset Market Clarity Act, commonly referred to as the CLARITY Act.
He warns Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) that current legislative language falls far short of protecting bank deposits from yield-bearing stablecoin instruments, while separately signaling that the banking lobby intends to submit detailed amendment recommendations to lawmakers within days.
This is not simply a dispute over the payment of interest on digital tokens. This is a structural struggle over who is allowed to issue dollar-denominated instruments on a large scale within the U.S. financial system, and under what capital regime.
The banking industry’s opposition to the CLARITY Act’s stablecoin regulatory framework reflects a deeper institutional anxiety: Congress is poised to codify a two-tier architecture in which crypto-native issuers operate with lighter reserves and conduct requirements than federally supervised depository institutions, a condition that banks say SAB 121 has already made untenable.
(SOURCE: TradingView)
Clarity Act News: What the Banking Industry Really Demands
The Digital Asset Market Clarity Act was passed by the House of Representatives in July 2025 by a vote of 294 to 134, creating a proposed federal framework for regulating digital assets. However, the project is blocked in the Senate due to concerns that payment stablecoins could offer returns or rewards, which the banking lobby sees as a way to circumvent regulated deposit accounts.
The Tillis-Alsobrooks compromise draft, released in April 2026, aimed to balance these concerns but missed the mark-up deadline set by the Senate Banking Committee due to increased bank lobbying.
The project prohibits traditional stablecoin yield but allows rewards based on account balance or duration. Banking groups say these are akin to yield products and could divert funds from bank deposits, potentially reducing lending by more than 20%, a claim disputed by the crypto industry.
Additionally, banks are concerned about SEC Staff Accounting Bulletin No. 121, which requires them to hold capital reserves for the crypto assets they manage for their clients, hindering their ability to compete with non-bank stablecoin issuers like Circle or Tether.
JUST IN: Senator Cynthia Lummis warns that every day the CLARITY Act is delayed is another day American businesses consider building their future elsewhere. pic.twitter.com/ES2Uje7uDo
– crypto.news (@cryptodotnews) May 7, 2026
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CLARITY Act News: SAB 121 and the uneven playing field – Why banks say the current framework is untenable
The banking industry’s opposition to the CLARITY Act’s stable regulations appears to be driven by competition concerns rather than deposit flight alone. If Congress establishes a stable framework for currencies without addressing SAB 121 capital asymmetry, banks could remain at a disadvantage compared to crypto-native issuers.
Current non-bank issuers of stablecoins operate under state licenses or offshore regulations that do not impose the same capital requirements as banks. As a result, popular stablecoins like Circle’s USDC and Tether’s USDT dominate the market, while bank-issued stablecoins are struggling due to high costs associated with existing SEC guidelines.
Additionally, President Trump has publicly supported the CLARITY Act, making crypto adoption a matter of national security. This puts banking industry lobbyists in a difficult position: They must oppose executive-backed legislation, which could limit the willingness of Senate Republicans to respond to their demands, ahead of the November 2026 midterm elections.
🚨 The CLARITY law suddenly seems real
Polymarket odds jumped to 65% after:
• The dynamics of the Senate have accelerated
• Disputes over Stablecoin have calmed down
• The White House wants an adoption on July 4But now Senator Gillibrand is drawing a line:
“No bill on the structure of the crypto market without… pic.twitter.com/4J2sutNqtd
– Wise Advice (@wiseadvicesumit) May 7, 2026
Crypto Industry and Congressional Response: What the Denial of Banking Amendments Reveals
The crypto industry’s response to the banking lobby’s concerns has been assertive. Coinbase Chief Policy Officer Faryar Shirzad criticized the banking industry’s claims as being rooted in personal competitive interests rather than real systemic risk, indicating Coinbase’s commitment to supporting the Tillis-Alsobrooks compromise without further amendments.
Current prediction markets show uncertainty over the passage of the CLARITY Act, with Polymarket’s probability around 46% and Galaxy Research suggesting a 50-50 chance, taking into account the Senate’s 60-vote requirement and upcoming recess. Complicating matters, some Democratic senators pushed for ethics clauses that the White House rejected, making a clean vote more difficult.
The fate of the CLARITY Act news hinges on whether proposed amendments expected by the banking lobby can reshape the bill without prompting crypto players, such as Coinbase, to withdraw. Ultimately, Senate Republicans’ willingness to meet these demands while maintaining support from the White House and the crypto industry will be crucial to establishing a stable regulatory framework for coins by 2026.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article is intended to provide accurate and current information, but should not be considered financial or investment advice. Because market conditions can change quickly, we encourage you to verify the information for yourself and consult a professional before making any decisions based on this content.
Daniel Frances is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. Hailing from crypto since 2017, Daniel leverages his experience in on-chain analytics to write evidence-based reports and in-depth guides. He holds certifications from the Blockchain Council and is dedicated to providing “insight gain” that overcomes market hype to find real utility for blockchain.
