White House crypto adviser Patrick Witt on Wednesday called out banks for lobbying against a stablecoin yield ban they originally demanded, posting “Make it make sense” as an August deadline looms.
Why Witt Said ‘Make It Make Sense’
Witt posted on X that the American Bankers Association spent months demanding a ban on stablecoin interest payments to protect community bank deposits.
The Clarity Act included exactly that ban. Banks then turned around and said the CLARITY Act must be stopped because it would destroy community bank lending.
American Bankers Association president Rob Nichols told CNBC the banking industry supports crypto regulation but said the current bill leaves a gap.
Stablecoin issuers could route yield payments through affiliates and exchanges rather than paying them directly, effectively bypassing the ban Congress intended.
Moreover, Nichols said fixing that requires just two paragraphs of edits to the 600-page bill.
Where The Ethics Compromise Stands
Senators Thom Tillis (R-NC) and Ruben Gallego (D-AZ) finalized a new ethics compromise, according to CoinDesk, though no details have emerged publicly.
The revised language needs White House approval and enough Democratic buy-in to clear 60 votes in the Senate.
Senator Cynthia Lummis (R-WY) expressed exhaustion on X. “After nearly 11 months of giving almost everything asked of us, I genuinely don’t know what else my Democrat colleagues need before we act,” she wrote.
How Much Time Is Left?
Senate Majority Leader John Thune (R-SD) told Fox News the Senate will probably vote on the Clarity Act but acknowledged it depends on whether Democrats show up.
“We’ll see if the Democrats give us the votes to get on the bill,” Thune said.
The practical deadline for starting the cloture process, the multi-day procedure required to advance the bill to a floor vote, is this week.
Each day without a motion narrows the path. Thune himself said the bill almost certainly lacks time to finish before the August recess.
Meanwhile, Coinbase (NASDAQ:COIN) CEO Brian Armstrong said earlier that the bill is at the one-yard line. Industry lobbyists are quietly shifting hopes to September if the bill does not start moving by the end of this week.
If the Clarity Act fails in September, a lame duck session passage looks unlikely, and a Democratic House win in November could send the bill back to the drawing board entirely.
Photo via Shutterstock
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