Miles Jennings, head of policy and general counsel at a16z crypto, said Thursday on X that the banking industry’s campaign against the CLARITY Act is likely to backfire. His argument: if the bill is blocked, the stablecoin-yield arrangement banks have lobbied hardest to stop would remain in place.
“The bewildering thing about TradFi's extreme efforts to kill CLARITY is that they are likely accelerating their own obsolescence,” Jennings wrote. He said the GENIUS Act is already law and “opened the floodgates for dollars to move onchain,” adding that other real-world assets will follow whether or not CLARITY passes.
Jennings says blocking CLARITY would preserve the outcome banks oppose
Without the market-structure bill, Jennings said, “crypto intermediaries will keep paying yield on stablecoin deposits under GENIUS, the very outcome banks have been lobbying so hard against.”
He described CLARITY as “a lifeline” for traditional financial institutions because it would let them take part in the onchain economy and could even allow them to use permissionless decentralized finance, or DeFi. Without the bill, he said, “many institutions will be sidelined.”
Jennings leads policy at a16z crypto and serves as the firm’s general counsel. a16z crypto was also among the firms that signed an industry letter urging Senate leaders to schedule a floor vote on the legislation.
Six banking groups asked lawmakers to tighten the stablecoin rewards restriction
On May 14, the Senate Banking Committee voted 15-9 to advance the Digital Asset Market Clarity Act, or H.R. 3633. The bill would split digital-asset oversight between the Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC.
After that committee vote, six banking trade groups said the bill should be strengthened “by tightening the prohibition on interest-like rewards for holding stablecoin.” The groups were the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, Independent Community Bankers of America, and National Bankers Association.
They said that without guardrails, “stablecoin offerings are expected to draw away bank deposits and threaten local lending and economic activity across the country.”
The same six groups repeated that demand on July 22 after the Senate released an updated version of the bill. They said the draft “still puts at risk the local lending that drives economic activity in the U.S.” and added that they appreciated senators’ willingness to consider “targeted changes that would strengthen the prohibition on interest-like payments for holding stablecoins, which will siphon away the bank deposits that fuel small business, mortgage and farm loans.”
Jennings says many traditional financial firms default to an anti-DeFi position
Jennings tied the banks’ stance to institutional incentives rather than analysis. At most traditional finance organizations, he wrote, “no one will get punished for defending the status quo. But if things change and anything goes wrong, heads will roll.”
In replies in the same thread, he said he is “not sure they're being strategic.” He added that many institutions hear “decentralized finance,” understand it as removing intermediaries, and because they are intermediaries themselves, “default to being anti-DeFi.”
By contrast, he said strategic institutions “realize that DeFi is a tool they can use to offer their customers cheaper and more efficient services.”
Bill still awaits floor time
The CLARITY bill is still waiting for floor time in the Senate. More than 200 crypto companies and lobbying groups have urged Senate leaders to schedule a vote “without delay.”
Galaxy Digital head of research Alex Thorn, meanwhile, cut his odds of passage in 2026 from 75% to 60%, citing a shrinking floor calendar and unresolved provisions tied to ethics and illicit finance.