The potential for cryptocurrency firms to offer yields on stablecoin holdings has become a central sticking point in the CLARITY Act negotiations. White House crypto adviser Patrick Witt argues that such rewards do not threaten traditional banks, stating both sides must compromise as the legislative window for the landmark crypto market structure bill is closing rapidly.
The banking industry should not feel threatened by crypto companies offering stablecoin yield to customers, and both sides must compromise on the issue, according to White House crypto adviser Patrick Witt. Witt said it was unfortunate the issue has become a major point of contention between the crypto industry and banks.
He told Yahoo Finance that crypto service providers sharing yield with customers does not threaten the banking industry’s model. “They can also offer stablecoin products to their customers, just the same as crypto. This is not an unfair advantage in either way, and many banks are now applying for OCC bank charters themselves to start offering bank-like products to their customers.”
Witt added he does not believe this will be an issue in the future. The ability to offer stablecoin rewards has emerged as a significant pain point, contributing to delays in passing the CLARITY market structure bill.
The proposed CLARITY Act establishes clear regulatory jurisdiction over crypto markets between the SEC and the CFTC. It also creates an asset taxonomy for cryptocurrencies.
Government officials and industry executives have warned the looming 2026 US midterm elections could derail efforts to pass it. US Treasury Secretary Scott Bessent stated that if Democrats were to take the House, the prospects of a deal would fall apart.
Witt said the window for action is still open but rapidly closing. The White House Crypto Council aims to have the CLARITY Act signed into law before the midterms take all the oxygen out of the room.
