TLDR

  • Senator Angela Alsobrooks addressed banking executives at a Washington summit, emphasizing the need for mutual concessions on the CLARITY Act crypto legislation.
  • Banking institutions have opposed the bill due to concerns that stablecoin rewards programs could drain deposits from conventional banking systems.
  • Alsobrooks and Senator Thom Tillis are developing a compromise framework that permits restricted stablecoin rewards tied to active transactions rather than idle account balances.
  • Senator Tillis plans additional meetings with Coinbase representatives and banking associations before finalizing his position on the current proposal.
  • Polymarket odds show a 69% probability of Trump signing the legislation this year, while industry analysts forecast passage by July.

The U.S. Senate continues efforts to advance the Digital Asset Market Clarity Act, though tensions between traditional banking and cryptocurrency sectors remain a significant obstacle. Speaking at an American Bankers Association summit in Washington on Tuesday, Senator Angela Alsobrooks, a Democratic member of the Senate Banking Committee, called for compromise from all parties involved.

“I think I have to level set that all of us will probably walk away just a little bit unhappy,” Alsobrooks said.

Stablecoin rewards have emerged as the central issue dividing stakeholders. Traditional banking institutions worry that allowing crypto platforms to offer rewards on stablecoin holdings would trigger a migration of customer funds from conventional savings products to digital asset platforms. The American Bankers Association has actively campaigned to eliminate what it characterizes as a regulatory gap in the proposed legislation.

Cryptocurrency advocates have already conceded ground by agreeing to prohibit rewards on dormant stablecoin balances. The remaining question centers on whether rewards connected to active account use — such as purchases or trades — should remain permissible.

JPMorgan Chase CEO Jamie Dimon recently indicated the banking sector might accept transaction-linked rewards, aligning with proposals the crypto industry has presented during White House discussions.

The Compromise Taking Shape

Alsobrooks has partnered with Republican Senator Thom Tillis to develop acceptable legislative language. Their objective involves permitting certain stablecoin rewards while safeguarding traditional banks against significant deposit losses.

Senator Mike Rounds, another Banking Committee member, stated on Tuesday that he continues evaluating options for stablecoin rewards regulation, suggesting a connection to transaction activity rather than total account value might work.

The Senate Banking Committee previously set a markup hearing date for the bill but postponed the session. A rescheduled markup could occur before March ends, depending primarily on whether Tillis supports the existing draft.

Tillis remains uncommitted. Following multiple meetings with industry representatives and White House officials last week, he intends to conduct at least one additional session with Coinbase delegates and banking trade associations before making his decision.

Where the Bill Stands Now

Successful passage through the Banking Committee markup would lead to consolidation with a version already approved by the Senate Agriculture Committee. The combined legislation would then require a full Senate vote, which would depend on substantial Democratic support.

This presents a considerable hurdle. Democratic senators have voiced apprehensions regarding decentralized finance protocols, vacant positions at the CFTC and SEC, and ethics requirements surrounding senior government officials holding personal cryptocurrency investments — language interpreted as referencing President Trump.

Timing factors add additional pressure. Senate floor scheduling faces constraints, and competing priorities including foreign policy matters and Trump’s push for voter-ID legislation could delay consideration of cryptocurrency bills.

The U.S. Office of the Comptroller of the Currency recently released a proposed rule consistent with last year’s GENIUS Act stablecoin legislation. Cryptocurrency sector representatives maintain the proposal accommodates their intended rewards program structures.

Polymarket currently assigns a 69% probability to Trump signing the bill into law. Kristin Smith, President of the Solana Policy Institute, has projected CLARITY Act passage by July.

Industry organizations report negotiations are progressing favorably while acknowledging substantial work remains. These groups are simultaneously developing contingency strategies should the markup extend beyond March.