The Bank Policy Institute (BPI) has formally opposed the latest draft of the CLARITY Act, citing "shortcomings" on stablecoin yield and illicit finance provisions. The banking group sought a total ban on stablecoin yields, as the current compromise only prohibits passive rewards on idle balances. This opposition has influenced key Republican senators, threatening the bill’s slim majority in the Senate. With only two weeks before the August recess, Majority Leader John Thune expressed doubt about passage, while market expectations for the bill’s 2026 approval briefly dropped to 32%.
The U.S. banking trade group, the Bank Policy Institute (BPI), has opposed the newly released CLARITY Act draft, flagging gaps on key issues. In a statement on July 23, the BPI said the bill still has “shortcomings” on stablecoin yield and illicit finance provisions.
The banking industry has been opposed to the earlier stablecoin yield compromise, which only allowed incentives based on account activity, not idle balances. This passive yield ban sought to address banks’ capital flight concerns.
Unfortunately, the banking industry sought a total ban on any form of stablecoin yield or incentive. The banking sector has lobbied lawmakers, including Sen. John Curtis (R-Utah) and Sen. John Cornyn (R-Texas), who now share the banks’ concerns.
If Sen. Curtis and Cornyn withhold support, Republican support will drop to 49. This means the bill would need 11 Senate Democrats to reach the 60-vote threshold.
Some pro-crypto Democrats like Sen. Angela Alsobrooks and Ruben Gallego have opposed the bill due to inadequate provisions on ethics and illicit finance. Only two weeks remain before the Senate breaks for the August recess.
Senate Majority Leader John Thune warned the bill may fail to pass before the recess. “I don’t think we’ll be able to get them done. I would like to get at least Clarity started,” Thune stated.
White House Chief Crypto Advisor Patrick Witt urged Thune to schedule the vote. “You’d be waiting forever (for Democrats). Nobody thought that we could actually produce an ethics provision that had real teeth,” Witt said. Market expectations for the bill’s passage in 2026 briefly dropped to 32% on Friday.
