Several U.S. banking associations are pushing back against the current draft of the Digital Asset Market Clarity Act, arguing that its latest compromise language still does not fully prohibit yield and interest on stablecoins. For banks, the fight is centered on one issue: if stablecoin issuers can keep offering return-like incentives through revised structures, customer deposits could move away from the banking system.
Banks say the draft still leaves room for workarounds
The dispute has continued even after Senators Thom Tillis and Angela Alsobrooks were reported to have reached agreement on language defining stablecoin yield. According to crypto journalist Eleanor Terrett, banks are not unified behind the revised text. Large banks that serve broad customer bases are still not fully on board, while some other financial institutions, including certain community banks, are more open to the current wording.
Terrett said the sticking point is the narrow phrasing around stablecoin rewards, which “still leaves room for crypto firms to work around the restriction.” In comments posted on social media, she said banks do not view the deal as a real compromise because it does not eliminate yield entirely and instead changes how it may be offered. She added that banks could take their objections to other members of the Senate Banking Committee before markup.
Five banking organizations call the language insufficient
In a joint statement released on May 4, the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America said the proposed language “falls short” of banning the payment of yield and interest on stablecoins.
The groups argued that the draft still allows rewards to be calculated using duration, balance, and tenure. In their view, that structure could encourage users to hold stablecoins idle for longer periods, weakening the stated goal of preventing deposit flight. The organizations closed with a direct warning: “This is a significant loophole that must be addressed.”
The episode also shows that the banking sector itself is split. Some institutions want tougher restrictions on crypto-related products tied to stablecoins, while others appear willing to accept the current compromise. That division is likely to remain visible as the bill moves through the Senate process.