The CLARITY Act Is Near Passage… Here’s What Big Banks Fear Most

3-Point Summary

• Large U.S. banks view the CLARITY Act as a direct threat to their deposit-based business model and are working to slow or reshape the bill.
• The core structural conflicts center on stablecoin yield, bank-only regulation, financial stability framing, and consumer choice.
• The bill’s passage depends not on timing but on how these four unresolved pillars are ultimately defined and negotiated.

Big banks fear the CLARITY Act could disrupt deposits, weaken regulatory leverage, and shift financial power toward stablecoins.

20‑Second Shorts Video (Updated July 12, 2026)

Right Before the CLARITY Act Passes… What Big Banks Fear the Most

Why Big Banks Are Trying to Block the CLARITY Act
— Structural Conflicts Around Stablecoins, Deposits, and Regulatory Power

The CLARITY Act is a landmark bill that aims to reshape the regulatory framework for digital assets in the United States.
Because it determines how stablecoins, on‑chain finance, and digital payment systems will be defined and regulated, the bill carries enormous implications for both traditional financial institutions and the crypto industry.
Among them, large banks believe the bill could directly threaten their existing business models if passed, and analysts suggest they are attempting to slow or redirect the legislative process through various means.

Below are five major structural conflict points that explain why this tension exists.

For deeper context, you may also find the following previous articles helpful:
• The Real Reason the CLARITY Act Stalled 2: Conflicting Interests in the Digital Dollar War
• After the CLARITY Act, Stablecoins Begin to Seize the Payment Market
• After the CLARITY Act, Global Finance Begins Shifting Toward Ethereum

The crypto community has been buzzing recently.
Coinbase accidentally posted a Norway vs. Brazil match result before the game even started — and the “wrong prediction” turned out to be exactly correct.
While everyone was laughing, White House crypto adviser Patrick Witt suddenly appeared and publicly asked Coinbase:
“So… when will the CLARITY Act pass?”
Coinbase Chief Legal Officer Paul Grewal responded that they would not make the same mistake of getting ahead of themselves like they did with the football prediction, but added a meaningful hint:
“It could be soon.”
Congress returns from recess on July 13, and negotiations are still ongoing.
The market is now focused on one question:
“Will they get it right this time — just like the football match?”

1) The Push to Ban Stablecoin Yield

Large banks argue that allowing stablecoin yield would severely weaken the competitiveness of traditional bank deposits.
If USDC or USDT yield becomes widely accessible, deposits could migrate away from banks, undermining their core revenue model.

Coinbase and the broader crypto ecosystem counter that yield represents consumer choice and financial innovation.
They argue that banning yield protects banks while suppressing on‑chain financial development.

2) Attempts to Bring Stablecoins Under Bank‑Only Regulation

Banks are pushing to classify stablecoins as financial products that must be issued under bank regulatory frameworks.
This would place stablecoin issuers under bank‑level oversight for reserves, issuance, and settlement — effectively giving banks a monopoly over the stablecoin market.

The crypto industry argues that stablecoins are a digital payment innovation that does not need to be monopolized by banks.
They warn that placing stablecoins under bank regulation would slow innovation and exclude non‑bank issuers from the market.

3) Framing Stablecoins as a Financial Stability Risk

Banks claim that rapid stablecoin growth could introduce systemic risks into the existing financial system.
They argue that stablecoin payments could bypass bank settlement networks, large stablecoin reserves could drain bank deposits, and DeFi represents a form of “shadow banking.”

Crypto advocates counter that stablecoins improve transparency, settlement speed, and verifiability through on‑chain mechanisms.
They argue that traditional banking suffers from opaque risks, slow settlement, and centralized bottlenecks.

4) Leaving Ambiguous Language in the Bill to Preserve Regulatory Leverage

Banks appear to prefer vague wording in the CLARITY Act that would allow regulators to restrict stablecoins or DeFi later.
Phrases like “operating under appropriate supervision” or “additional measures may be taken if financial stability is affected” leave room for future interpretation.

The crypto industry insists that the bill must contain clear language, arguing that ambiguity enables regulators to impose restrictive interpretations after passage.
They warn that vague wording could become a tool for bank‑aligned regulators to control stablecoin development.

5) Concerns Over Deposit Outflows

Banks fear that allowing stablecoin yield could trigger large‑scale deposit outflows.
Reduced deposits would limit lending capacity, weaken profitability, and raise concerns about financial system stability.

Crypto advocates argue that deposit outflows simply reflect healthy competition and consumer choice.
They emphasize that stablecoin yield disrupts the monopoly structure of the traditional deposit market.

Conclusion — The CLARITY Act’s Passage Depends on How Four Core Pillars Are Resolved

The four pillars — stablecoin yield, regulatory authority, financial stability framing, and consumer choice — remain unresolved.
Whether the CLARITY Act passes before these issues are fully settled, or only after they are clearly defined, is still uncertain.
What is clear is that the timing of the CLARITY Act’s passage depends less on “when” and more on “how” these structural conflicts are resolved.
And that process is still ongoing.

Younchan Jung
Researcher exploring structural shifts in AI, blockchain, and the on‑chain economy.

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