After an extensive delay due to banking industry representatives who fear a decline in revenue if stablecoin holders earn yild on the holdings, the Digital Asset Market CLARITY Act of 2025 is now scheduled for a Senate Banking Committee hearing for this coming Thursday, May 14th.
Movement on the legislation arrived when a compromise regarding “rewards” was agreed to for stablecoin holders. While banking organizations remain chagrined with the compromise, the bill is expected to make it through markup with bipartisan support and then to a Senate floor vote.
Last week, banking associations joined together to express their dislike of the compromise.
“We will be sharing our detailed suggestions for strengthening the proposed language with lawmakers in the coming days, and we will continue to work in good faith to help Congress embrace innovation while protecting the deposits that drive local lending and economic activity in their communities.”
The fallacy of the banking sector’s reluctance is the fact that they can compete directly with stableoicn issuers on a level playing field. Deposit holders could receive a higher interest rate incentivizing them to remain with a bank. As banks have well established customers and changing a bank typically is hindered by customer inertia, banks remain well positioned to gain from any rewards or yield affiliated with stablecoin holdings.
After approval in the Senate, the bill must be reconciled, between the House version of the CLARITY Act before it moves to the White House to be signed into law. Expectations are for the legislation to become law before the Congressional summer recess.
