The banking industry is pushing back hard against the Clarity Act stablecoin proposal, claiming the legislation would let bad actors evade existing financial rules. The criticism lands just as senators thought they had a compromise last week that could finally break the logjam on broader crypto legislation. That deal appears to have fallen apart.
Banks warn of new loopholes
Industry representatives argue the Clarity Act's stablecoin framework lacks the safeguards needed to prevent evasion of anti-money laundering and sanctions regimes. Their core complaint: the bill's definition of a “qualified stablecoin” is too narrow, and its exemption for certain decentralized arrangements would create an easy off-ramp for illicit finance. The timing isn't great — Congress has been trying to square stablecoin rules with traditional bank oversight for months.
Compromise effort stalls
Senators had floated a revised version of the Clarity Act last week, hoping to win over skeptical committee members. The proposed changes included tighter reporting requirements and a slower timeline for non-bank issuers to come under federal supervision. But the banking lobby's latest salvo suggests those tweaks didn't go far enough. Lawmakers are now back to square one, with no clear path forward. The unresolved question is whether the Clarity Act can survive opposition from both the banking industry and crypto advocates who say the bill still gives regulators too much power.
