The Digital Asset Market Clarity Act is now in jeopardy of failing in the US Senate due to a single issue: the debate over stablecoin yields. Major banks are lobbying senators, arguing that allowing crypto platforms to pay yields higher than traditional bank deposits would undermine the national financial system.
JPMorgan Chase CEO Jamie Dimon has openly opposed easing this rule. “Banks are not going to just sit there. We are going to fight it. If we lose, we lose,” he said regarding digital asset interest rates. Savings rates at Chase are currently capped at 0.01%, well below the 3.4% inflation rate. This stands in stark contrast to the situation two decades ago, when savings rates were above 4%.
On the other side, crypto exchanges continue to attract inflows by offering high yields. Kraken and Gemini offer stablecoin yields of over 3.75%, followed by Coinbase at around 3.5%.
This contrasting pattern is what has fueled banking lobbying at the legislative level.
The Disputed Legal Loophole
The root of this debate lies in the existing GENIUS Act. While the rule strictly prohibits stablecoin issuers from offering yields directly to token holders, the legislation leaves a grey area for exchange platforms, allowing crypto exchanges to continue paying interest to their users.
This loophole prompted maneuvers by the American Bankers Association (ABA). The banking association continues to urge Congress to tighten the anti-yield language in the Clarity Act draft to eliminate any room for compromise. Conversely, crypto industry representatives from the Crypto Council for Innovation stated that the boundaries of this issue are already locked in the legislative text, making revisions unnecessary.
Three Decisive Weeks Before the Election
As a result of banking lobby maneuvers, the chances of the Clarity Act passing are now shrinking. Passing the bill requires a 60-vote supermajority in the US Senate, but several Republican senators have reportedly changed course to support the banks’ arguments.
The bill’s final fate will be decided in the last three weeks of September, just ahead of the midterm elections.
For retail investors, this political debate in the Senate ultimately comes down to simple math. As inflation continues to erode the value of money each year, sticking with a 0.01% yield is essentially a guaranteed loss - and even the most intense banking lobby maneuvers cannot change the reality of those numbers. Reported by CoinDesk.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
