Clarity Act Stalls in Senate as Banks, Crypto Industry Clash

The Clarity Act, a regulatory framework for cryptocurrencies and digital assets, is facing a crucial vote in the Senate. The bill has been stalled due to disagreements between banks, the crypto industry, and ethics concerns tied to President Donald Trump's interests.

Banks are opposing the bill because of its provision on interest-like payments on stablecoins, which they argue could pull deposits out of local institutions and hinder lending to small businesses and farmers. The American Bankers Association and nearly 80 banking groups have signed a letter urging changes to the bill.

The crypto industry, however, is lobbying aggressively for the bill as written, with major exchange leaders publicly backing it. Democrats are withholding support due to ethics concerns, which could be addressed through stronger language in the revised bill.