The high-stakes push for landmark cryptocurrency legislation has entered a period of deep uncertainty. The Clarity Act, a bill designed to bring regulatory order to the “grey area” of digital assets, has hit a fresh impasse as the banking industry and crypto giants remain deadlocked over deposit security.

The primary hurdle is a provision allowing crypto firms and stablecoin issuers to offer yield-bearing rewards. Traditional lenders, represented by the American Bankers Association, warn that this could trigger a massive $500 billion deposit flight by 2028, stripping banks of the capital needed for consumer lending.

While the White House recently brokered a compromise, allowing rewards for peer-to-peer payments but banning them on idle holdings, banks have rejected the deal. They argue the loophole remains too wide, potentially imperilling financial stability.

The deadlock has drawn a sharp rebuke from President Trump, who accused the banking industry on Truth Social of trying to “undermine our powerful Crypto Agenda.” For the Trump administration, crypto reform is a core priority, especially following the heavy industry backing during the 2024 campaign.

Analysts warn that if a bill is not signed by July, the window will effectively close as lawmakers pivot to the 2026 mid-term elections. Beyond banking disputes, the bill faces internal friction over anti-money laundering rules and ethics provisions, specifically those aimed at preventing elected officials from profiting from crypto ventures, a nod to the Trump family’s own digital asset interests.

With the Senate Banking Committee yet to finalize a text and geopolitical tensions in Iran diverting floor time, the prospect of a “regulatory gold standard” for crypto in 2026 is rapidly fading.

End Notes

Source: https://www.reuters.com/business/finance/crypto-bill-hits-new-impasse-raising-doubts-over-its-future-2026-03-05/