The CLARITY Act reaches a critical step—can it overcome obstacles?

Although some key American legislators are pushing to send the bill to the president for signature before July 4th, the banking industry is still working hard to lobby to kill the CLARITY Act.

Currently stalled in the Senate for months, the core dispute still remains** over the provisions related to stablecoins and the revenue rights of digital asset companies**.

A recent bipartisan compromise has been openly resisted by the banking industry. Banks believe the draft threatens the foundation of local lending and could trigger a large-scale deposit flight.

But supporters remain undeterred. Encouraged by expectations of support from Trump, Senate negotiators are holding firm to pave the way for a key committee review during the week of May 11.

The crux of the dispute is how the CLARITY Act will regulate “revenue-generating payment stablecoins.” Five major industry groups—including the American Bankers Association and the Banking Policy Research Institute—have jointly criticized the loopholes in Section 404 drafted by senators.

The banking industry acknowledges that the draft’s policy objective is to prohibit direct payment of earnings and interest, but notes that the current text still allows exchanges and intermediaries to distribute benefits under names such as “member rewards,” as long as the calculation method is not exactly the same as traditional interest.

The banking alliance argues that allowing rewards to be calculated based on standards such as holding duration and account balances essentially encourages users to hold stablecoins idle, while banks rely on these idle deposits to support community lending.

Its internal research warns that once alternatives to revenue-generating stablecoins become widespread, funds used for consumer, small business, and agricultural loans could be reduced by 20%.

It is also notable that polarization within the financial industry has intensified in parts. Large retail banks and community lending institutions still strongly oppose, but due to a lack of institutions with large consumer deposit departments, they show cautious acceptance of the existing framework.

Faced with the deadlock, legislators have launched a counteroffensive. Senators insist that the draft has gone through a tug-of-war: while eliminating threats of deposit flight, it does not stifle innovation. The text explicitly bans stablecoin rewards from functionally mimicking bank deposit interest, and the banking industry has participated throughout the negotiations.

The Senate’s advancement of legislation is now in countdown mode. The chair of the Senate Banking Committee confirmed that efforts are being made in May to advance bipartisan cooperation and push forward market-structure legislation.

In the coming weeks, efforts will be focused on pushing for committee review, aiming to submit the final bill to the president before the end of June.

Supporters warn that if it cannot be passed before the August recess, it could cause permanent capital flight—effectively ceding the United States’ leading position in the digital asset sector.

Despite the banking industry’s massive lobbying push, market sentiment overall remains optimistic. Recently, the heads of Ripple and Coinbase have both publicly said they hope for a structural shift during the legislative session.

Market forecasts show that the probability of the CLARITY Act becoming law in 2026 is over 60%. As the May 11 review draws near, whether the momentum for bipartisan cooperation can ultimately overcome deeply rooted fiscal resistance will soon be determined.