The US Senate Banking Committee has postponed its markup of the Digital Asset Market Clarity Act following a withdrawal of support from major industry players and intensifying debates over stablecoin interest.
Washington’s efforts to establish a comprehensive crypto regulatory framework have hit a major roadblock as the US Senate Committee on Banking, Housing, and Urban Affairs postpones its markup of the Digital Asset Market Clarity Act. The delay follows a high-profile withdrawal of support from industry leaders, including Brian Armstrong, CEO of Coinbase, who described the current draft as “materially worse than the status quo”.
A primary point of contention is a proposed amendment to the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. This provision would effectively prevent exchanges and other digital asset platforms from paying interest or yield to customers holding stablecoins, even if the platform is not the token’s issuer. Anil Oncu, CEO of Bitpace, explained that while the act correctly focuses on legal certainty, an absolute prohibition on earning interest would put digital money at a structural disadvantage to traditional banking and push users toward less transparent offshore alternatives.
The banking lobby has remained a vocal proponent of these restrictions, citing concerns that yield-bearing stablecoins could trigger a “deposit flight” from community banks. However, Luke Youngblood, founder of Moonwell, noted that the banking lobby’s influence is problematic for the bill’s prospects. He said community banks claim yield-bearing stablecoins would make their savings accounts uncompetitive, which is ironic given they spent decades lobbying for the right to pay interest on deposits themselves. Youngblood also pointed to unrealistic ethics provisions as a threat that could kill the legislation entirely.
While the CLARITY Act faces friction, the industry has welcomed the reintroduction of HR 8378, the Securities Clarity Act, by Representative Tom Emmer, Representative Darren Soto, and Representative Ro Khanna. The Global Digital Finance (GDF) industry body supports this technology-neutral legislation because it provides regulatory certainty by excluding “investment contract assets” from the definition of a security, provided they meet certain conditions. Carl Schonander, Head of Americas Regulatory Affairs at GDF, said the bipartisan initiative shows it is possible to promote the digital assets industry while simultaneously protecting consumers.
The draft bill’s handling of decentralised finance (DeFi) has also drawn criticism. Jerome de Tychey, President of Ethereum France, explained that the bill’s DeFi provisions remain incomplete, lacking a clear legal definition of “decentralisation”. He added that banking lobbyists have secured their position while DeFi-specific questions get pushed to future rulemaking, which risks codifying ambiguity. Vincent Chok, founder and CEO at First Digital, commented that a blanket restriction on rewards fails to account for the growing complexity of finance where assets converge into new use cases, such as settlement assets for agentic payments.
Despite the domestic stalemate, global hubs continue to advance their own digital strategies. Islam Shawky, co-founder and CEO of Paymob, which recently secured a full operating licence in the UAE, noted that government initiatives in the Emirates are aiming to boost the digital economy through highly connected systems. He explained that the UAE is at an inflection point of digitisation, leveraging instant payment platforms like Aani to overcome traditional digital payment delays.
The Senate Banking Committee now faces the challenge of brokering a compromise that satisfies the crypto industry’s need for operational flexibility and the traditional banking sector’s desire to protect its deposit base.
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