CLARITY Act Stalled in Senate Over Stablecoin Disputes

The U.S. Digital Asset Market Structure Clarity Act, known as the CLARITY Act, remains stalled in the Senate more than seven months after passing the House of Representatives, as lawmakers grapple with disputes over stablecoin rewards and regulatory authority over cryptocurrency transactions. The bill, which aims to establish a framework for digital assets by clarifying oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, has drawn sharp divisions between banking interests and the crypto industry.

The legislation cleared the House in July 2025 by a vote of 294 to 134. However, it has yet to advance through the Senate Banking Committee, where negotiations have focused on whether stablecoin issuers can offer yields or rewards to holders. Banking groups, including the American Bankers Association, argue that such incentives would divert deposits from traditional institutions and undermine community banks. In contrast, cryptocurrency firms contend that allowing activity-based rewards, such as those tied to user participation, would enhance stablecoins' utility without harming the financial system. Senators Angela Alsobrooks and Thom...