Rep. French Hill said the CLARITY Act could help Congress resolve major open questions in U.S. stablecoin regulation. Speaking on Fox Business, the chairman of the House Financial Services Committee also pointed to the GENIUS Act, which the House passed last July with bipartisan support to create a framework for dollar-backed stablecoins.
GENIUS Act framed dollar-backed stablecoins as payment instruments
Hill said Congress began tackling stablecoin policy during last year’s legislative session. Under the GENIUS Act, dollar-backed payment stablecoins were defined as tools for payments on blockchain networks. The point was narrow by design. Hill said lawmakers agreed these assets should function strictly as payment devices and should not pay yield.
That distinction sits at the center of the current debate. By keeping stablecoins in a payments lane, lawmakers aimed to separate them from products that look more like deposits or yield-bearing financial instruments.
CLARITY Act covers bank and nonbank issuers
The House also passed the CLARITY Act during the same period, according to Hill. He said both bills drew bipartisan backing, including support from 78 Democratic lawmakers. The proposed framework was written to cover both bank and nonbank stablecoin issuers rather than focus on one segment of the market.
Hill said Congress was trying to build consistent standards across the sector, including rules for sales practices, capital requirements, and supervision. The goal, in his account, was to avoid a patchwork approach that would leave different issuer types operating under sharply different expectations.
Banks argue the proposal may leave crypto firms with more freedom
Debate over the CLARITY Act is still active in Washington. Banking industry representatives have argued that the proposal could give crypto companies more room to operate, while banks would remain under tighter financial regulation. That concern has become one of the main pressure points in the discussion.
Hill acknowledged those objections during the interview and said lawmakers are weighing possible compromises. He stressed that stablecoin issuers should receive equal treatment. Congress, he said, wants to avoid creating regulatory imbalances between bank and nonbank providers, so the framework is still being reviewed across the industry.
Treasury rulemaking may address yield and reward questions
Hill also pointed to a second track outside the legislation itself: rulemaking by the U.S. Treasury Department to implement the GENIUS Act. He said that process could take up questions tied to yield or rewards connected to stablecoin transactions.
Some policymakers and industry figures have suggested rewards could serve as a compromise. The report noted that JPMorgan CEO Jamie Dimon had raised concerns about fairness between banks and crypto companies. Hill said regulators may consider those issues as Treasury moves through implementation. At the same time, the Senate is still reviewing the CLARITY Act, and Hill said lawmakers could also write stablecoin rules directly into the bill.