Banks Push Prohibition on Stablecoin Yield; Clarity Act Stalled Amid White House Crypto Talks

US banks advanced a proposal during White House crypto council talks to prohibit paying interest on customer balances held in dollar-pegged stablecoins, citing safety and soundness concerns. This position is the primary roadblock to passage of the Clarity Act, a major bill building on the GENIUS Act. Key meetings included participants from JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS), PNC (PNC), Coinbase (COIN), and others. The proposed rule would allow only "extremely limited" exemptions, authorize enforcement and penalties, and require a two-year study of payment stablecoins. The American Bankers Association, Bank Policy Institute, and the Independent Community Bankers Association issued a joint statement urging regulation that supports innovation without compromising deposit safety. The Senate Banking Committee’s markup has been postponed twice since January, with Coinbase CEO Brian Armstrong opposing recent drafts over yield provisions.