The CLARITY Act, crypto market infrastructure legislation, is expected to move forward in the US Senate this month with a floor vote arriving in May.
According to multiple reports, a deal is in the works on stablecoin yield, the biggest hurdle to the legislation’s approval. It has been reported that Senator Thom Tillis, a Republican from North Carolina, anticipates the bill to be revealed this week. Senator Tim Scott, the Chairman of the Senate Banking Committee, appeared to confirm Tillis’s statements during an interview with Fox News.
If the legislation is saddled with further delays, it could lose momentum and undermine important improvements for the entire US financial sector.
The incumbent banking industry has battled the bill, specifically stablecoin yield, while providing limited proof that it will harm traditional banks’ abilities to lend money. In fact, the real issue for the banks is a possible decline in revenue, as they may need to compete by offering higher yields to deposit holders. Today, many large banks offer little to no yield for deposit holders.
At the same time, deposit holders have long had options beyond low-yield bank accounts; thus, the bank sector’s argument loses all credibility.
A research report authored by the Council of Economic Advisers, part of the Trump White House, found little compelling evidence that stablecoin yield would impact banks.
While a yield compromise is expected to be near, details remain vague. As top crypto industry participants have not been critical of the draft bill, it appears more likely that a bill will be approved.