Banking lobby secures bipartisan amendment on stablecoin yield restrictions

banking lobby: The banking lobby refers to coalitions of U.S. banking trade groups and their lobbyists that represent the interests of commercial banks and community banks in federal policy debates, especially on issues like deposit competition and financial regulation. In the context of the Clarity Act, these groups pushed hard for tighter stablecoin yield restrictions, and secured a bipartisan amendment that further limits the ability of crypto platforms to offer bank‑like rewards on stablecoin holdings, even though the broader bill failed to advance. Politics: Although the Senate recently failed to advance the CLARITY Act in a high-profile vote, an under-the-radar amendment to strengthen stablecoin yield restrictions still passed with broad bipartisan support, marking a quiet but significant policy win for the banking lobby on the stablecoin rewards issue. Regulation: Banking trade groups have repeatedly warned Congress that allowing stablecoin rewards could accelerate deposit flight from traditional banks, and have used this argument to push for stricter, more comprehensive bans on stablecoin yield in legislative text and regulatory frameworks. Legislation: The CLARITY Act is a major U.S. crypto markets bill whose Section 404 language was negotiated to prohibit crypto firms from paying interest or yield on stablecoin holdings in ways that are economically or functionally equivalent to bank deposit interest, while still allowing activity-based rewards tied to bona fide platform use.