Headline: CLARITY Act Stalls as Banks and Crypto Fight Over Whether Stablecoins Can Pay Interest
A bill designed to bring regulatory clarity to the U.S. crypto market—the Digital Asset Market Clarity Act of 2025, or CLARITY Act—remains deadlocked in Congress over one central question: should stablecoins be allowed to pay interest?
The CLARITY Act was drafted to define how crypto assets are classified and regulated in the U.S., but early versions drew sharp public opposition from Coinbase and other crypto firms. One of their major complaints: the bill would ban yield-bearing stablecoins. That provision has won fierce backing from banks, which want to preserve limits on stablecoin activity that could, they argue, threaten traditional deposits.
Senator Thom Tillis (R-N.C.) has been working on a revised draft intended to bridge the divide. But reports say the new language has already met resistance from both camps and has not been released publicly, leaving negotiations stalled even as both sides insist they want a deal.
Why banks are worried — and why Moody’s says not yet
A senior analyst at Moody’s Investors Service says the banking industry’s fear may be premature. Abhi Srivastava, associate vice president in Moody’s Digital Economy Group, told market watchers that stablecoins currently pose limited threat to traditional banks. The U.S. already has fast, low-cost, reliable payment rails, which reduces the appeal of stablecoins for everyday consumer transactions. Crucially, Srivastava said, the present legal ban on stablecoins paying yield makes it unlikely stablecoins will siphon deposits from banks at scale in the near term.
Still, growth continues
Even if near-term disruption is limited, the stablecoin market is expanding. Data show stablecoin market capitalization exceeded $300 billion by the end of last year — reflecting rising use in payments, cross-border commerce, and on-chain finance. Tokenized real-world assets (RWA)—traditional assets represented on blockchains—are also gaining momentum alongside stablecoins.
A potential turning point
Srivastava warned the landscape could change as stablecoins and tokenized assets grow. If adoption accelerates, banks could eventually see deposit outflows and diminished lending capacity—precisely the scenario bank lobbyists are preparing to prevent.
Politics and risks for the industry
Industry proponents warn that failing to pass a comprehensive CLARITY Act could leave crypto exposed to piecemeal or harsher actions from regulators less sympathetic to digital assets. That prospect adds urgency to fraught negotiations that so far have produced little movement.
Bottom line: lawmakers are close to a high-stakes compromise—if they can answer whether stablecoins should be permitted to pay interest. Until then, the CLARITY Act remains stuck between banks that want the ban and crypto firms that say yield-bearing options are essential to their business models.
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