The Stablecoin Bill is Stalled: Here’s How It Impacts Your Daily Crypto Trades

The Digital Asset Market Clarity Act is in limbo in a Senate hearing room that has yet to hold a planned markup. In July 2025, the bill was approved by the House with a broad bipartisan vote of 294 to 134, indicating true agreement. However, months of negotiations have been halted by a single clause regarding whether crypto platforms can pay their users interest on stablecoin holdings, and the legislative window for completing it is clearly closing.

Here’s the specific battle: As of this writing, Coinbase offers its customers an annual yield of 3.5% on specific USDC balances. That rate is significantly better than what the majority of conventional savings accounts pay because it is offered on a dollar-pegged token that settles instantly and can be transferred anywhere in the world for little money. Banks are concerned about this arrangement, particularly the possibility that millions of depositors will notice that comparison.

A stablecoin yield provision could divert up to $1 trillion in deposits from traditional banks to stablecoin products by 2028, according to earlier estimates from Standard Chartered analysts. This figure explains why, on March 5, the American Bankers Association rejected a compromise mediated by the White House, despite President Trump’s post on Truth Social claiming that banks were “holding the bill hostage.”

Understanding the dispute’s structure is important because, regardless of how it ends, it has an impact on your USDC and Tether positions. The CLARITY Act’s stablecoin-specific companion, the GENIUS Act, forbids stablecoin issuers from paying holders yield directly. However, in a report published on March 6, the Congressional Research Service noted that the bill does not explicitly define who is a “holder,” creating a legal ambiguity regarding whether intermediaries such as exchanges can continue to provide customers with financial advantages from stablecoin holdings. The loophole that banks wish to close is that gray area. Additionally, Coinbase, Ripple, and Circle have been basing their customer economics on this product feature.

The White House Council of Economic Advisers directly joined the discussion on April 8. According to their analysis, a complete ban on stablecoin yield would increase bank lending by about $2.1 billion, or 0.02% of all loans, but result in a net welfare loss of about $800 million, meaning that the harm to consumers would outweigh the systemic benefit. Crucially, large banks would receive 76% of the lending gains rather than community banks, whose protection the banking lobby has been claiming. According to the report’s conclusion, “Our model shows that this concern is quantitatively small.” The US is losing digital asset activity to countries with more transparent regulations, according to Treasury Secretary Scott Bessent, who has been publicly pleading with Congress to take action.

It’s unclear if the White House’s economic analysis influences any votes. Prior to the publication of this report, banks rejected the compromise, and there is currently no indication that new research will alter their stance. It does, however, change the framing. Now, the administration’s own economists have stated that the banks’ main point is exaggerated. For Senate Republicans, who might otherwise yield to the concerns of the banking industry, this creates a different political environment.

The impasse produces a certain level of ambient uncertainty for traders and regular cryptocurrency users. Millions of people currently use yield-bearing stablecoin products, but their legal status is still up for debate. Coinbase’s USDC yield offering is in a regulatory gray area; depending on what Congress produces, it may be restricted or explicitly permitted, but it is technically allowed under the current ambiguity. These products continue to exist but function without congressional approval if the bill is passed without a yield clause. The market grows dramatically and traditional banks are put under additional pressure from competitors if it passes with yield explicitly allowed. If the bill fails completely, the OCC charter route takes over as the main route to federal legitimacy, and future rulemaking—rather than legislation—resolves the yield issue. This is a slower, less certain process that prolongs the uncertainty surrounding product design.

The part that might be most important is the calendar. The realistic window for moving the bill forward before midterm election pressures and an ongoing Iranian conflict take center stage in congressional attention, according to insiders close to the negotiations, is late April to early May. According to recent research by Stifel’s chief Washington strategist Brian Gardner, Congress finds it much more difficult to devote committee time and floor votes to crypto regulation when a military operation is underway. When Iranian airspace became a policy priority, the CLARITY Act was already behind schedule.

Observing this from outside the negotiating rooms, it seems that the impasse is more about the particular issue of who gets to profit from customer deposits in a digital-first financial system than it is about disagreements over the fundamentals. Because it genuinely affects both consumer welfare and the structural stability of the banking system—two factors that are typically aligned but in this instance aren’t obviously pointing in the same direction—that question lacks a clear answer. The White House has now adopted a stance. Congress hasn’t done so yet.

The cryptocurrency industry adjusts if nothing changes. For ten years, it has been adjusting to regulatory uncertainty. However, the companies seeking OCC charters while advocating for legislation are doing so because they are unable to place a wager on a Senate calendar, not because they favor the regulatory path. Clarity—congressional approval for the entire product stack, including the yield features that set stablecoin products apart from the conventional savings accounts they are increasingly competing with—is what the CLARITY Act offers that an OCC charter does not. The trades you make today are taking place within a legal framework that the legislators haven’t completed creating until that clarity comes, or doesn’t.