The Senate Banking Committee held a markup of the CLARITY Act on Thursday, pushing forward a yearslong effort to set clear rules for when crypto tokens count as securities or commodities. But the session arrives with a fight brewing over a compromise provision that would ban customer rewards on idle stablecoin holdings — a rule the banking industry says could pull deposits out of regulated lenders.
The stablecoin rewards fight
The disputed language, brokered by Senators Thom Tillis and Angela Alsobrooks, would prohibit rewards on stablecoins that just sit in a wallet. Rewards tied to other activities — like sending payments — would remain allowed. The carve-out was meant to address concerns that stablecoin rewards could compete with bank savings accounts, but it hasn't satisfied the banking lobby. Trade groups, including the American Bankers Association, argue the provision still creates a loophole, especially after the GENIUS Act permitted certain intermediaries to pay interest on stablecoins.
Banking lobby mobilizes
The ABA isn't waiting to see how the markup plays out. CEO sent a letter to member bank CEOs this week, urging them to contact their senators and push for changes to the stablecoin-rewards provision. The campaign reflects broader anxiety that stablecoin-related products could siphon deposits away from the regulated banking system, potentially creating new economic risks. The letter didn't mince words — it framed the provision as a direct threat to traditional deposit models.
Party-line expectations
Analysts expect the CLARITY Act to advance along party lines, with no Democrats on the Senate Banking Committee anticipated to vote in support. The markup itself was delayed earlier this year after major disputes over key sections of the legislation. The House passed its version back in July 2025, and the Agriculture Committee approved its own take at the start of 2026. Thursday's committee vote will test whether the Tillis-Alsobrooks compromise can hold, even as the banking lobby pushes for more concessions.
With the industry campaign in full swing and no Democratic votes expected, the bill's fate beyond the committee stage remains uncertain. The next concrete test will come when the full Senate considers the measure — assuming it clears Thursday's markup at all.
