The stablecoin dispute that held up the CLARITY Act for more than five months has resurfaced, with banking groups again pressing for changes to the measure as lawmakers try to pass it before the August recess.
Stablecoin Fight Returns as Banks Once Again Seek Changes to the CLARITY Act
14 July 2026 - 23:48 CEST
By Jona Jaupi
Banking groups and a federal law enforcement association are urging senators to change key parts of the CLARITY Act, reopening disagreements over stablecoin rewards as lawmakers and the White House push to advance the bill.
The CLARITY Act would create a federal framework for digital assets in the US. The House passed the bill in July 2025, but the legislation stalled in the Senate for months as banks and crypto companies clashed over whether crypto platforms should be allowed to offer interest-like rewards. A revised version of the bill cleared the Senate Banking Committee in May and must still be approved by the full Senate.
The calls for changes show that major parts of the bill are still being debated as supporters seek enough backing to move the bill before the Senate leaves for its summer recess on 10 Aug. Failure to pass it by then could sharply reduce its chances of becoming law until 2030, as Senate floor time narrows and the November midterm elections could shift control of Congress.
The push comes after President Donald Trump called on the Senate to pass the legislation "in honor of Senator Lindsey Graham," the late South Carolina senator. Trump said on 13 Jul that the bill would help the US stay ahead of China in crypto and artificial intelligence.
Banks want stronger stablecoin rules
Trump's call for action came the same day the American Bankers Association (ABA), Independent Community Bankers of America (ICBA) and 76 state banking associations sent a letter to Senate leaders asking lawmakers to strengthen the bill's rules on payment stablecoins.
The groups emphasized that while they support innovation and clear rules for digital assets, they believe the current language could allow stablecoins to compete with bank deposits by offering interest, yield or similar rewards.
"In particular, we remain concerned that ambiguities within the bill could encourage stablecoin arrangements to effectively function as substitutes for deposits, despite Congress's longstanding and clearly stated intent that payment stablecoins should serve as transaction tools rather than store-of-value products," the associations wrote.
They also warned that if customers move money from banks into stablecoins, community banks could have fewer funds available for mortgages, small business loans and farm lending.
Law enforcement seeks changes
The Federal Law Enforcement Officers Association (FLEOA), which represents more than 34,000 active and retired officers from more than 65 federal agencies, also asked lawmakers to change parts of the bill.
The Association said on 10 Jul that it supports the CLARITY Act but wants changes to make sure the bill does not impede criminal investigations, anti-money laundering (AML), counterterrorism financing or sanctions enforcement.
The group also asked lawmakers to make it clearer that companies cannot avoid regulation by claiming to be decentralized and that the bill does not weaken existing criminal liability standards.
"FLEOA remains committed to supporting policies that allow the United States to lead in blockchain and digital asset innovation while ensuring federal law enforcement retains the authorities necessary to investigate and prosecute sophisticated financial crimes," said association President Mathew Silverman.
FLEOA's letter follows concerns raised by other law enforcement groups. In a 23 Jun letter to the Trump administration, the heads of the National District Attorneys Association, National Association of Assistant United States Attorneys, International Association of Chiefs of Police and National Sheriffs' Association said parts of the bill could make it harder to investigate financial crimes and trace stolen funds.
Ethics narrative grows
The letters and concerns come as the narrative surrounding ethics also intensifies among lawmakers.
In a 13 Jul letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer, Democratic Senator Elizabeth Warren called for rules that would stop the president, vice president, members of Congress and their families from profiting from crypto businesses.
The lawmaker pointed to President Trump's financial disclosure, which showed he earned about $1.4bn from crypto ventures in 2025. They argued the CLARITY Act should include stronger ethics rules to prevent conflicts of interest.
Meanwhile, Republican Senator Cynthia Lummis said on 14 Jul that any ethics rules should apply equally to all public officials rather than just target Trump.
"We have to be fair; we can't write crypto ethics rules for one person," Lummis wrote on X. "This is bigger than @POTUS; it has to stand the test of time."
