The Clarity Act, which would restrict interest payments on stablecoins, is the subject of closed-door legislative sessions this week — and banking industry lobbyists are fighting hard to stop it. The debate pits consumer demand for yield-bearing stablecoins against regulatory efforts to keep them closer to traditional money. Critics say the secrecy of the talks undermines the public's ability to weigh in on a policy that could reshape how millions use crypto.
The Clarity Act's interest ban
The bill, formally titled the Clarity Act, targets stablecoin issuers that offer rewards or interest-like returns to holders. Under the proposed language, any stablecoin that pays yields above a nominal rate would be classified as a security, subjecting it to SEC registration and disclosure rules. Proponents argue this protects consumers from unregistered lending products. But the practical effect would be to kill most yield-bearing stablecoins, which have attracted billions in deposits by offering 4-8% annual returns.
Banking lobby's quiet opposition
Banking trade groups are lobbying heavily against the measure, according to multiple sources familiar with the discussions. Their concern is less about consumer protection and more about competitive turf: if stablecoins can't pay interest, banks worry they'll lose deposits to crypto platforms that find other ways to reward users. The lobbyists are pushing for a narrower rule that would exempt bank-issued stablecoins from the interest ban — a carve-out that consumer advocates say would entrench incumbent power.
Rewards as an adoption engine
Stablecoin rewards have become a central driver of crypto adoption over the past two years. From remittance corridors in Latin America to DeFi savings pools in Southeast Asia, the ability to earn yield on dollar-pegged tokens has pulled in users who never touched crypto before. Restricting those rewards could stall that momentum. It's not a hypothetical — similar rules in other jurisdictions have already pushed users toward unregulated alternatives.
Transparency concerns in closed sessions
The fact that these negotiations are happening behind closed doors has drawn fire from transparency advocates. Lawmakers are meeting with industry representatives and regulators in private, with no public records of the discussions. The final text of any amendment to the Clarity Act could emerge with little warning, leaving the broader crypto community scrambling to respond. That's a familiar pattern in D.C., but it's especially fraught here because the stakes are so concrete: real money, real products, real users.
The next milestone is uncertain. The legislative session runs through June, and the Clarity Act's stablecoin provisions could be folded into a broader financial services bill. What's clear is that the fight over interest payments is far from over — and the closed-door process isn't helping anyone trust the outcome.
