The White House has warned U.S. banks their hardline stance against the crypto market structure CLARITY Act could backfire. Banks fear deposit flight to high-yield stablecoins, but the administration argues a failed compromise would leave banks with no restrictions on those rewards. This clash occurs as stablecoins have become a major buyer of U.S. Treasury debt, purchasing $153 billion in bills by December 2025.
A clash over high-yield stablecoins is intensifying between U.S. banks and the White House. Banks are anxious that stablecoin rewards exceeding 5% will cause deposit flight, prompting strong opposition to the pending CLARITY Act.
Christopher Williston, President of the Independent Bankers Association of Texas, publicly dissented against a White House call for compromise. He cautioned, “Compromise on CLARITY is compromising local lending and economic production.”
Patrick Witt, a crypto advisor to former President Donald Trump, warned banks their position is self-defeating. Witt stated “No compromise on CLARITY means no restrictions on intermediaries offering stablecoin rewards… this would be catastrophic.”
The existing GENIUS Act already allows stablecoin issuers to pay rewards via exchanges and DeFi protocols. Therefore, stablecoin yields would continue even without the CLARITY Act, a point central to the White House’s warning.
The administration’s push is partly strategic, as stablecoins help service U.S. Treasury debt cheaply. Recent research shows stablecoins bought $153 billion in Treasury bills by late 2025, making them a marginal but significant buyer. The same report noted stablecoins sometimes drive T-bill yields lower by over 3.5 basis points.
Despite the impasse, prediction markets still price a 71% chance the bill passes this year. The political and economic stakes continue to rise as both sides dig in.
