Crypto Group Pushes Back on CLARITY Act Bank Plan

• The Digital Chamber released new principles challenging bank-backed proposals on the CLARITY Act.
• Stablecoin yield restrictions remain the central dispute between banks and crypto firms.
• Lawmakers face mounting pressure to pass the bill before midterm campaigns dominate the agenda.

The CLARITY Act debate has intensified after the Digital Chamber released a competing set of principles to challenge proposals backed by major U.S. banks. The blockchain trade association defended the current draft bill while signaling room for compromise on specific issues.

The banking sector has pushed for tighter restrictions, particularly around stablecoin yields. Bank representatives argue that allowing rewards or yield on stablecoins could weaken the traditional deposit system.

The Digital Chamber acknowledged banks’ request for a two-year study on the impact of stablecoins on bank deposits. However, the group rejected any automatic regulatory rulemaking that would follow such a study. CEO Cody Carbone told lawmakers the crypto industry remains open to negotiation, but it will not accept measures that effectively ban innovation.

Carbone emphasized that crypto firms already made concessions by limiting features that resemble traditional interest payments. He stated that the industry is ready to make changes to the static reward for holding, but still wants the flexibility to provide incentives for transactions. The coverage of developments in crypto regulations mentions that the stablecoin rewards are still a sticking point.

White House Meetings Signal Urgency

The recent meetings between the crypto industry and banking stakeholders at the White House did not lead to a final agreement. Both parties showed a willingness to continue negotiations, but there was no significant shift in their stance.

Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, warned that the legislative window is narrowing. He said that lawmakers need to act swiftly before the focus turns to the campaigns for the midterm elections. Witt called for nimbleness on the part of the crypto industry leaders and the large banks to come to a compromise.

“We’ve hosted numerous meetings and will continue to encourage negotiation,” Witt said in a statement that was made public.

Industry analysts monitoring the situation on WhiteHouse.gov point out that regulatory certainty is still a high priority for digital asset markets. Analysts at Yahoo Finance also point out how a lack of clarity on the CLARITY Act is holding back institutional investment.

Stablecoin Yields Remain Core Dispute

Banks say that yield-paying stablecoins could potentially steer deposits away from banks. They say that this could potentially destabilize lending and the financial system as a whole. Crypto enthusiasts say that rewards on the blockchain are a sign of technological advancement and not a threat to the financial system.

The Digital Chamber said that if banks do not agree to further negotiations, the industry will stick with the current stablecoin yield structure. Carbone called on banking organizations to come back to the negotiating table and work out a compromise.

This is just another reflection of the larger conflict between decentralized finance innovation and the existing financial system. Policymakers have to weigh the need for investor protection, financial system stability, and innovation.

Political Calendar Adds Pressure

Midterm elections loom large over the legislative process. Witt stressed that once political focus shifts fully toward campaigning, passing major crypto legislation will become far more difficult.

The CLARITY Act aims to establish clearer boundaries between securities and commodities regulation in digital assets. Supporters argue that regulatory certainty will drive investment and innovation. Critics caution against rapid approval without extensive review.

Both sides acknowledge that time is short. The coming weeks may determine whether the CLARITY Act advances or stalls indefinitely.

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