Treasury Chief Pushes Crypto Law as Banks and Crypto Firms Clash Over Yields

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U.S. Treasury Secretary Pushes to Pass a Crypto Law – Not Everyone Agrees

Key Takeaways

  • Treasury Secretary Scott Bessent is pushing the Senate to pass the CLARITY Act before the 2026 midterms.
  • The bill has been stalled in the Senate for over 260 days, blocked primarily by disagreements over stablecoins yields.
  • A new White House economic study undercuts the banking industry’s main objection.
  • Polymarket traders currently put the bill’s chances of being signed into law this year at 63-72%.

A bill aiming to establish national rules for digital assets – excluding stablecoins – passed the House in July 2025 with a vote of 294 to 134. However, it’s been stalled in the Senate for over eight months due to disagreement over whether companies issuing stablecoins should be permitted to pay interest to their customers.

The Competitive Urgency Argument

In an opinion piece for the Wall Street Journal, Bessent argued that the U.S. needs to act quickly on digital asset regulation. He explained that without clear federal rules, companies are moving their operations to places like Singapore and Abu Dhabi, which have been more proactive. Despite the fact that about one in six Americans own some form of digital assets and the crypto market is worth around $3 trillion, businesses in this space currently operate without clear rules in the United States. Bessent believes this lack of clarity isn’t harmless—it’s driving business and skilled workers overseas and potentially weakening efforts to prevent money laundering.

This legislation aims to settle a long-running disagreement about which agency, the SEC or the CFTC, should oversee digital asset trading. The CLARITY Act would give the CFTC main control over immediate (spot) trading of digital commodities, while the SEC would continue to regulate assets considered investment contracts. This clear separation is important because it would provide legal certainty for exchanges, companies issuing tokens, and large investors who have been operating in an uncertain legal environment and have often faced regulatory enforcement actions where the regulator’s authority was unclear.

Building on the GENIUS Act

The CLARITY Act expands on the GENIUS Act, which was passed in July 2025 and created the first federal regulations for payment stablecoins. The GENIUS Act required these stablecoins to be fully backed by safe assets like U.S. Treasury bonds, but its scope was limited. The CLARITY Act aims to cover a wider range of digital assets, including tokenized assets and decentralized exchanges, and to establish broader rules for the overall market – areas the GENIUS Act didn’t cover.

The biggest sticking point in stablecoin regulation is how much interest they can offer. Banks are strongly opposing rules that would allow stablecoin companies to pay interest, because they worry customers will move their money out of traditional banks – especially smaller, local ones – if they can earn similar returns on stablecoins without the same protections like deposit insurance.

Coinbase CEO Brian Armstrong strongly disagrees with the proposed bill, believing that preventing stablecoins from offering interest would harm the U.S.’s ability to compete in the payments industry and that having no regulation is better than overly strict rules. This disagreement has created a significant divide within the crypto industry. Treasury Secretary Bessent, in unusually blunt terms, described those opposing the bill and any regulation as a ‘nihilist group,’ and reportedly suggested they might want to consider moving their operations to a country like El Salvador.

White House Economists Undercut the Banks

A new White House report, released on April 8th, tackles a major concern raised by the banking industry. The report finds that the interest earned on stablecoins doesn’t pose a significant threat to traditional bank deposits. It also argues that limiting those yields wouldn’t meaningfully improve bank stability and would limit choices for consumers. This is important because it weakens the main policy argument against stablecoins that earn interest, suggesting the remaining debate is more about competition than financial stability.

Not Everyone Is Convinced

While some support moving quickly on legislation, others raise concerns that go beyond disagreements about stablecoin yields. The American Bankers Association warns that passing a bill with loopholes could lead to customers withdrawing money from community banks, potentially harming parts of the financial system it wasn’t intended to affect. A recent study didn’t fully address this concern, as it looked at overall financial risk but didn’t specifically analyze how smaller, regional banks with fewer deposits might be impacted.

Those in the cryptocurrency industry also have strong concerns. Coinbase, for example, initially opposed earlier drafts of the bill because limits on returns – added to satisfy banks – would make stablecoins impractical for everyday payments. Brian Armstrong, Coinbase’s CEO, believes a flawed bill is worse than no bill at all, and this view is widely shared. The thinking is that it’s easier to wait for a better opportunity to create legislation than to try and overturn restrictive rules once they’re in place.

Legal experts are also worried that when laws are rushed through with little discussion, the wording often lacks clarity and becomes vulnerable to legal challenges. This could leave the new regulations in a state of uncertainty for a long time. Some in the decentralized finance community believe this sense of urgency is intentionally used as a political tactic to force the industry to accept federal control, even if that control doesn’t align with how these digital assets are designed to function.

The Broader Strategic Play

Bessent’s recent article goes beyond just the details of the proposed bill. He suggests the November 2024 election will be a key moment for crypto regulation, potentially moving away from strict enforcement – the approach criticized during the previous administration – toward a more proactive effort to establish clear rules. He also believes that regulated stablecoins, especially those backed by short-term U.S. government bonds, could increase demand for these bonds, potentially lowering federal borrowing costs, even if only slightly. Regarding a Bitcoin reserve, Bessent explained that the U.S. plans to hold onto the $15-20 billion in digital assets it has already seized, rather than buying more.

It’s still unclear if the current efforts – including financial benefits, emphasizing competition, and pressure from the Treasury Secretary – will convince the Senate to act before the midterm elections make it difficult. As of early April, predictions markets suggest a 63-72% chance the CLARITY Act will become law by 2026, indicating hope but also acknowledging that resolving disagreements over stablecoin yields could prove challenging and potentially lead to a stalemate.

This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. Before making any investment choices, be sure to do your own research and talk to a qualified financial advisor.

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2026-04-09 22:10