Crypto Law Stalls Over Stablecoin Rewards and Ethics

The Digital Asset Market Clarity Act, known as Clarity, has reached a crossroads. The bill first won the House but is now stuck in the Senate Banking Committee, where debates over how stablecoins can earn rewards are heating up. Senators have submitted more than 130 amendments before the upcoming markup, with Senator Elizabeth Warren alone proposing 44 changes. Some of these tweaks are small, but others aim to push back against the bill’s supporters. Opponents include banks worried that stablecoins could erode traditional deposits and groups concerned about the broader ethical and security risks of expanding crypto. One voice from the crypto community, Steve Yelderman of Etherealize, says he expects Clarity to pass thanks to bipartisan progress and White House backing. He cautions that Washington can still surprise everyone.Earlier this year, the bill almost moved forward until Coinbase withdrew its support after a proposed ban on stablecoin rewards. Senators Thom Tillis and Angela Alsobrooks later brokered a compromise on yield, but banking lobbyists argue the deal favors stablecoin firms too much. The American Bankers Association has sent more than 8, 000 letters to Senate offices criticizing the arrangement. During tomorrow’s markup, Chairman Tim Scott is likely to emphasize protecting everyday Americans and national security while encouraging U. S. crypto innovation. Meanwhile, Democrats are sharpening their focus on ethics, particularly the Trump family’s extensive involvement in crypto markets. A Senate aide notes that Democrats fear the bill will miss essential ethics provisions unless they are added now. Both parties have met multiple times this week to discuss how best to incorporate these concerns into Clarity.