In CLARITY Act news today, the American Bankers Association and the Bank Policy Institute issued a joint statement on Monday, May 4, 2026, formally opposing the stablecoin return provisions included in the latest draft of the Digital Asset Market Clarity Act, known as the CLARITY Act.
Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) warn that current legislative language falls short of protecting bank deposits from yield-yielding stablecoin instruments, while separately noting that the banking lobby intends to present detailed amendment recommendations to lawmakers within days.
This is not just a dispute over interest payments on digital tokens. It represents a structural competition over who is allowed to issue dollar-denominated instruments on a large scale within the US financial system, and under what capitalist system.
The banking industry’s opposition to the CLARITY Act’s stablecoin regulatory framework reflects a deeper institutional concern: that Congress is on the cusp of codifying a two-tier structure in which crypto issuers operate under lighter reserves and behavioral obligations than federally supervised depository institutions, a condition that banks say SAB 121 has already made unsustainable.
Clarity Act News: What the banking industry is actually asking for
The House of Representatives passed the Digital Asset Market Clarity Act in July 2025 by a vote of 294 to 134, creating a proposed federal framework for regulating digital assets. However, it has stalled in the Senate over concerns that payment stablecoins might offer yield or rewards, which the banking lobby sees as a way to defraud regulated deposit accounts.
The draft Tillis-Alsobrooks settlement, released in April 2026, aimed to offset these concerns, but failed to meet a deadline set by the Senate Banking Committee due to intense banking pressures.
The draft bans traditional returns on stablecoins but allows rewards based on account balances or duration. Banking groups say these products are similar to the products and can move funds from bank deposits, potentially reducing loans by more than 20%, a claim disputed by the cryptocurrency industry.
Additionally, banks are concerned about SEC Staff Accounting Circular 121, which requires them to hold capital reserves for the crypto assets they manage for clients, hindering their ability to compete with non-bank stablecoin issuers like Circle or Tether.
JUST IN: Senator Cynthia Lummis warns that every day the Clarity Act is delayed is another day American companies think about building their future elsewhere https://t.co/NFsjGXWGUB pic.twitter.com/ES2Uje7uDo
— crypto.news (@cryptodotnews) May 7, 2026
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Clarity Law News: SAB 121 and the Unlevel Playing Field – Why Banks Say Current Framework Is Untenable
The banking industry’s opposition to stablecoin regulations in the CLARITY Act appears to be driven by competitive concerns rather than deposit flight alone. If Congress creates a stablecoin framework without addressing the SAB 121 capital asymmetry, banks may remain at a disadvantage compared to original crypto issuers.
Existing non-bank stablecoin issuers operate under state licenses or offshore regulations that do not impose the same capital requirements as banks. As a result, popular stablecoins such as Circle’s USDC and Tether’s USDT dominate the market, while bank-issued stablecoins struggle due to the high costs associated with current SEC guidelines.
Additionally, President Trump has publicly supported the CLARITY Act, positioning cryptocurrency adoption as a matter of national security. This puts banking lobbyists in the difficult position of opposing executive-backed legislation, which could limit the extent to which Senate Republicans are willing to meet their demands, leading up to the November 2026 midterm elections.
🚨 The Law of Clarity suddenly became very real
Polymarket odds jumped to 65% after:
• Momentum accelerated in the Senate
• Cooling stablecoin disputes
• The White House pushed for the resolution to be passed on July 4But now Senator Gillibrand draws a line:
“There is no draft law on the structure of the cryptocurrency market without… pic.twitter.com/4J2sutNqtd
— Wise Advice (@wiseadvicesumit) May 7, 2026
The Cryptocurrency Industry and Congress’ Response: What the Response to the Bank’s Amendments Reveals
The cryptocurrency industry’s response to the banking lobby’s concerns has been firm. Faryar Shirzad, chief policy officer at Coinbase, criticized the banking industry’s claims as rooted in competitive self-interest rather than true systemic risk, signaling Coinbase’s commitment to supporting the Tillis-Alsobrooks settlement without further amendments.
Current prediction markets are showing uncertainty over passage of the CLARITY Act, with Polymarket odds standing at around 46% and Galaxy Research indicating a 50-50 chance, taking into account the Senate’s 60-vote requirement and upcoming recess periods. To complicate matters, some Democratic senators pushed for ethics provisions that the White House rejected, making a clean vote more difficult.
The fate of the CLARITY Act news depends on whether expected amendment requests from the banking lobby are able to reshape the bill without prompting cryptocurrency stakeholders, like Coinbase, to opt out. Ultimately, the willingness of Senate Republicans to accommodate these demands while maintaining support from both the White House and the cryptocurrency industry will be crucial in creating a stable regulatory framework for cryptocurrencies by 2026.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to provide accurate and timely information but should not be considered financial or investment advice. Since market conditions can change rapidly, we encourage you to verify the information yourself and consult with a professional before making any decisions based on this content.
Daniel Francis is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. A crypto native since 2017, Daniel brings his background in cross-chain analytics to author evidence-based reports and detailed guides. It is certified by the Blockchain Council and is dedicated to providing “information gain” that cuts through the market noise to find blockchain’s real-world utility.
