By cryptoadmin You earn a very small amount of interest when you let banks hang onto your money, and bankers contend that letting crypto platforms pay you more just for holding stablecoins would throw the U.S. economy into danger.
That argument may have contributed to fatally derailing the Senate's Digital Asset Market Clarity Act. Even after a high-profile bipartisan compromise months back, bank lobbyists pushed their worries back into the forefront earlier this month, just in time to help knock over the already teetering legislation. Still, the destiny of U.S. stablecoin yield isn't yet resolved.
While the bill's section that goes after President Donald Trump's personal business ties to crypto has drawn the most fervent attention, the Clarity Act's revisions on stablecoin yield were what threw the bill off course early this year, and the banks haven't stopped arguing that crypto firms may try to offer stablecoin rewards that imitate interest on bank deposits and by extension threaten the role of banks and imperil U.S. lending.
The battle is likely to be finished one way or another next month, when the Clarity Act gets its final three weeks of Senate action before the midterm elections, and the stakes will test the old-guard strength of bank lobbyists against the high-spending political powers of crypto advocates.
The banks have made an appeal that what they're doing represents the public good: Their business model requires that people keep their money in deposits, which don't pay enough interest to compete with what crypto firms would pay in stablecoin yield, if given the chance. People can't be allowed to make money off their holdings of stablecoins, the banks contend, because if customers abandon low-interest bank deposits, the institutions won't be able to reuse their money to support bank lending.
One of their standard bearers, JPMorgan Chase & Co. CEO Jamie Dimon, says banks aren't being treated fairly, contending that stablecoins don't carry the same government scrutiny, regulations and requirements to track the identity of users.
"It should be fair and equal, period," Dimon, whose bank is the largest in the U.S., said in a June Fox Business interview, saying the Clarity Act had "almost no legal protections" to prevent money laundering and other illicit finance.
As the interest offered by bank savings accounts has dwindled, however, banking profits remain robust. The first quarter of 2026 showed an industrywide profit at a record $80.5 billion, according to the Federal Deposit Insurance Corp.'s quarterly banking profile that's a snapshot of the industry's health. And its key return-on-assets rate was at 1.26%, which is among the highest levels in recent years.
Colbert countered the claim that bank customers will shift to stablecoins, noting: "This has not been found to be true, or even suggested by current stablecoin activity."
Despite the rapid rise in stablecoin market cap to more than $300 billion, deposits are still flowing into the banks, jumping by nearly $400 billion in the most recently reported quarter, marking the seventh consecutive quarterly increase. U.S. banks have almost $21 trillion in deposits, according to FDIC data.
Bank deposits and stablecoin holdings are actually wildly different. Deposits are money left with a bank with the understanding that the bank will use it to make more money, and the amount is generally insured by a federal government program that guarantees the depositor won't lose anything. Stablecoins, under last year's new law, are backed 100% by reliable reserves, and those reserves can't be used for anything else — leaving little point for a complex federal insurance program.
Still, the banking insider argued that the large stablecoin issuers aren't impervious to major outside risks, such as runs and attacks from hackers, so they need to be regulated as such.
The current text of the Clarity Act insists that crypto platforms can't offer stablecoin programs that look anything like deposit interest. Holders of stablecoins can't be rewarded just for letting them sit, according to the bill, though it still leaves an opening for rewards programs based on using the tokens, akin to credit-card incentives. Despite this compromise worked out between a Republican and a Democrat lawmaker, bankers contend that it still doesn't protect their core product.
Do deposits = loans?
Banks assert that without their traditional base of deposits, it'll be harder and more expensive for them to extend loans for people to buy houses and run businesses. But in both of those segments of lending, the role of banks has been rapidly falling away.
Mortgage origination — meaning the initial lending of money to buy a home — was once dominated by banks, but outside competitors such as Rocket Mortgage rose in the past couple of decades to take more than two thirds of that market. And in business lending, the industry has also steadily given ground to "non-bank" lenders, including entities such as hedge funds, finance companies and business development companies, until banks' lending represents a much smaller fraction of business debt in the U.S., according to the sector's own data.
However, the major thrust of bank lobbying on the Clarity Act has been to suggest Main Street community bankers won't be able to extend mortgages and business loans if their depositors flee.
"When crypto gets a free pass, communities pay the price," according to a recent ad backed by the Independent Community Bankers of America, pitting community banks against the crypto industry.
That argument soured some lawmakers on the bill.
"My state right now — agriculture folks, local community people — are very, very worried about the effect on community banks," Senator Josh Hawley, a Missouri Republican, told Politico earlier this month. "They are blowing me up over it.
One recently established crypto advocacy group, the Digital Sovereignty Alliance, argues that the industry may want to give ground to the banks if it means better odds for Clarity.
"There are some battles worth fighting for innovation, and there are some battles that are better ceded to build a durable regulatory framework," Managing Director Adrian Wall said in a statement to CoinDesk. "If resolving the yield question is what it takes to bring the banking sector into a broader consensus on market structure, that is a trade worth making."
StablecoinsbanksInterest RatesJPMorganClarity Act 
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