The Senate Banking Committee is set to mark up the sweeping crypto market structure bill on Thursday.
American Bankers Association President and CEO Rob Nichols sent an urgent letter to bank CEOs across the country yesterday, May 10, warning that the current version of the CLARITY Act does not adequately prevent crypto companies from offering interest-like rewards on payment stablecoins.
Nichols argued in the letter that the gap could incentivize deposit flight from traditional banks and put economic growth and financial stability at risk and urged bank leaders to immediately contact their senators and push for tighter restrictions before Thursday’s vote.
The letter came days after Senate Banking Committee Chairman Tim Scott announced that the committee would hold an executive session on Thursday, May 14 at 10:30 a.m. to mark up the Digital Asset Market Clarity Act, as Reuters reported. The sweeping legislation would establish a comprehensive federal framework for digital assets, dividing regulatory jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Comission.
The sticking point, as it has been for months, is stablecoin yield. As The Defiant reported, the latest draft — negotiated by Senators Thom Tillis and Angela Alsobrooks — bans yield on passive stablecoin balances but permits activity-based rewards, a distinction the banking lobby says is still too permissive.
Banks warn the language could siphon trillions in deposits; crypto firms say the compromise is workable and have urged the committee to move forward.
“This markup is a make or break moment for American leadership in financial markets,” Kristin Smith, President of Solana Policy Institute said in comments to The Defiant, continuing:
“We’re committed to supporting the work ahead and getting this to President Trump’s desk in a form that fosters innovation, and protects developers and consumer choice.”
The CLARITY Act passed the House 294–134 in July 2025, following the GENIUS Act’s signing into law. Thursday’s markup is its next major hurdle — and possibly its last chance before the Memorial Day recess threatens to push the bill off the 2026 calendar entirely.
On-chain prediction market Polymarket currently shows the odds of passage this year at around 63%.
Commenting on the broader impact of the bill’s passage, the founder and CEO of Solana Policy Institute, Miller Whitehouse-Levine, told The Defiant:
“A markup date is the first step on the path to giving builders and financial institutions the certainty they need to build onchain in the United States.”
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.
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