The post Crypto Legislation Stalls As White House, Banks Clash appeared on BitcoinEthereumNews.com.

Talks over landmark U.S. cryptocurrency legislation have hit a fresh impasse after major banks rejected a compromise brokered by the White House, casting uncertainty over whether the bill will pass this year.  The stalemate has drawn criticism from President Donald Trump, who accused financial institutions of trying to undermine the effort. Trump, whose family is well invested in digital assets and bitcoin, posted on Truth Social: “We are not going to allow them to undermine our powerful Crypto Agenda.” He added that banks “need to make a good deal with the Crypto Industry” to advance legislation that he says is in the public interest. The stalled legislation, known as the CLARITY Act, follows last year’s GENIUS Act, which created the first federal framework for stablecoin issuers. Supporters of the CLARITY Act argue it is needed to provide clarity for cryptocurrency firms, which have been operating in a regulatory gray area that executives say has stymied growth and innovation.  The bill would give a defined regulatory framework over digital assets, potentially accelerating adoption across the financial system. The core dispute involves whether crypto exchanges should be allowed to offer yield-bearing rewards on stablecoins, digital tokens designed to maintain a $1 value. Banks warn that allowing such yields could siphon deposits from traditional bank accounts, threatening lending operations that are central to the economy.  Financial institutions are pushing for a ban on stablecoin yield payments as part of the legislation, citing risks to financial stability. Crypto firms, including Coinbase, counter that restrictions on rewards programs would be anticompetitive and stifle innovation. Stablecoins are at the root of the crypto conflict Stablecoins, they argue, must be able to offer incentives to attract customers. Analysts estimate that by 2028, stablecoins could divert up to $500 billion in deposits away from U.S. banks. In January,…

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Filed under: News - @ March 5, 2026 7:28 pm