On Monday, the U.S. Senate Banking Committee released the 309-page Digital Asset Market Clarity Act, 48 hours before a scheduled markup on Thursday. The bill, introduced by Chair Tim Scott (R-SC), Subcommittee Chair Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC), aims to create a federal framework for digital assets — but its stablecoin yield provision has already drawn fierce opposition from banking groups.
The stablecoin yield ban
Section 404 of the bill bars stablecoin issuers and their affiliates from paying yield on stablecoin balances that functions like bank interest. Activity-based rewards, such as cashback, are still allowed. The SEC, CFTC, and Treasury Department will have twelve months after enactment to write joint implementing rules. Galaxy Digital research argues the provision would actually pull trillions in foreign capital into U.S. banking infrastructure, offsetting any domestic deposit shift.
DeFi protections
The bill incorporates language from the Blockchain Regulatory Certainty Act, shielding software developers who don't control customer funds from being treated as money transmitters. That provision earned early support from Coinbase CEO Brian Armstrong, who said, "Not everyone got everything they wanted, but they got the must-haves." The bill also gives prosecutors new tools to pursue crypto money-laundering cases within the Clarity Act framework.
Political battle lines
Senator Elizabeth Warren condemned the bill for containing "zero ethics provisions" addressing President Trump and his family's $1.4 billion in crypto gains, and demanded no committee member support legislation without such provisions. Democrats, including Senator Kirsten Gillibrand, have drawn a firm line: no vote without an ethics clause barring members of Congress and the executive branch from certain crypto dealings.
Banking industry pushback
The American Bankers Association, Bank Policy Institute, and Independent Community Bankers of America sent a joint letter urging Congress to block the stablecoin provisions. They argue yield-bearing stablecoins threaten bank funding for mortgages and lending. But Senator Bernie Moreno (R-OH) called the mobilization the "banking cartel in full panic mode" and confirmed his vote in favor. Reports indicate the banking industry is split: large consumer-facing banks oppose the stablecoin language, while banks without retail arms are more receptive, and some community banks have quietly signaled support.
The committee is scheduled to mark up the bill on Thursday, May 14.
