The administration of US President Donald Trump is reportedly set to hold a key meeting with major banks and crypto companies to revive the long-stalled CLARITY Bill in Congress.
The meeting, organized by the White House Crypto Council, is aimed at easing a major dispute between two major financial powers, namely banks and the crypto industry, specifically over the issue of interest or rewards on US dollar-backed stablecoins.
The CLARITY Act was enacted to provide certainty about how digital assets are regulated in the United States, including the division of powers between the Securities and Exchange Commission (SEC) and the Commodity Trading Commission (CFTC).
However, its progress has stalled when debate arose over whether third parties such as crypto platforms would be allowed to offer returns to stablecoin holders.
Banks have strongly opposed the idea. They fear that interest-bearing stablecoins would cause a massive outflow of deposits, thus weakening the banking system.
Bank of America CEO Brian Moynihan has previously warned that up to $6 trillion could be taken out of banks if the practice is allowed.
Crypto companies, on the other hand, see the banks’ opposition as an attempt to stifle competition.
Coinbase CEO Brian Armstrong has been among the most vocal, even withdrawing support for the bill, arguing that a biased law is worse than no law at all.
Interestingly, not all crypto players agree. Several influential companies and groups like Ripple, Kraken, and a16z still support the CLARITY Act, indicating that the industry itself is divided.
Now, all eyes are on the Trump administration’s efforts to find a middle ground.
Whether the CLARITY Act is saved or buried, this decision will have a major impact on the future of crypto, not just in the United States, but around the world.
