Banks vow to continue stablecoin rewards fight after Clarity Act setback - TheBanker.com

The banking industry has signalled it will keep pressing its case over stablecoin reward programmes after a setback tied to the Clarity Act, according to TheBanker.com. The dispute centres on whether stablecoin holders should be able to earn rewards on their balances, and how far banks should be permitted to compete in that space.

The issue matters because stablecoins sit at the intersection of payments, deposits and digital assets. If reward-bearing stablecoins become widespread, they could draw balances away from traditional deposit accounts, which are a core source of bank funding. Banks have therefore argued for clearer rules that keep competition on an even footing, while crypto firms contend that rewards are a legitimate feature of the products they offer.

The precise legislative path remains unsettled, so the practical outcome is still open. What to watch: whether the Clarity Act is amended or revisited, how regulators interpret existing rules on rewards in the meantime, and whether banks and crypto firms converge on a shared framework. For markets, the key question is not just legality but where customer balances ultimately sit.