Banking Lobby Pushes to Ban Stablecoin Yields in CLARITY Act

Proposed amendment would reclassify interest-bearing digital dollars as securities, threatening DeFi lending models

Apr. 19, 2026 at 6:06am

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The Bank Policy Institute, a banking industry group, is making a last-minute push to attach an amendment to the CLARITY Act that would ban stablecoin issuers from paying yields to holders. The amendment would reclassify any interest-bearing stablecoin as a security, forcing issuers to go through full banking registration requirements that would effectively make the current model illegal to operate.

Why it matters

The CLARITY Act was intended to provide a regulatory framework for the stablecoin sector to grow, but the banking lobby's amendment would undermine that purpose. By targeting yields specifically, the amendment would redirect capital away from crypto-native dollar instruments and back into traditional financial vehicles like bank savings accounts and money market funds, protecting the banking sector's deposit margins.

The details

The Bank Policy Institute is leading an aggressive, eleventh-hour lobbying campaign to insert the amendment before the Senate vote on the CLARITY Act. If successful, the amendment would trigger registration requirements that Circle, Tether, and other stablecoin issuers are not equipped to meet, effectively gutting their business models. The knock-on effect could wipe out over $150 billion in market value concentrated in DeFi lending and staking protocols built around stablecoin yields.

  • The Senate vote on the CLARITY Act is approaching.
  • The banking industry's lobbying push has intensified in the last 48-72 hours.

The players

Bank Policy Institute

A banking industry group leading the lobbying effort to attach the yield prohibition amendment to the CLARITY Act.

Circle

A major stablecoin issuer that relies on yield mechanisms as a core part of its business model.

Tether

Another leading stablecoin issuer that could be severely impacted by the proposed amendment.

Blockchain Association

An industry group fighting against the banking lobby's amendment.

Senate Banking Committee

The committee reportedly under significant pressure to attach the prohibition before the CLARITY Act reaches the Senate floor.

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What’s next

The Blockchain Association is fighting the amendment, but the lobbying weight of the banking sector is considerable, and the political window to resist it is narrow. The vote in the Senate Banking Committee in the next 48 to 72 hours will be a key indicator of whether the yield ban amendment succeeds.

The takeaway

This lobbying effort by the banking industry represents an attempt to use the legislative process to eliminate a competitive threat to traditional financial institutions, rather than govern the crypto sector in a fair and balanced way. The outcome of the vote will reveal how much regulatory capture the crypto industry is still vulnerable to, and how seriously Congress is willing to prioritize the interests of the banking lobby over the needs of the digital asset ecosystem.